Reprioritized spending is affecting what, when, and if consumers make purchases
CHICAGO, August 15, 2023 – In July 2023, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), increased 2% compared to the same month last year, and unit sales declined 2%. Discretionary general merchandise spending declines continued with a 4% decline in dollar sales and 7% drop in unit sales compared to last July. CPG spending remained elevated with 4% growth in food and beverage, and a 3% increase in non-edible revenue. However, the impact of elevated prices on demand are evident in CPG, with unit sales falling 1% and 3% respectively across edible and non-edible segments, according to Circana, formerly IRI and The NPD Group.
“Retailers and manufacturers need to find the trigger points that will motivate the consumer to start to spend, despite reprioritization and the various economic challenges they are facing,” said Marshal Cohen, chief retail industry advisor for Circana.
Overall, discretionary general merchandise spending declines continued into the first week of August with another 5% year-over-year decline in sales revenue, and 8% drop in unit sales. The established shifts in consumer spending behavior are resulting in a delayed start to the back-to-school shopping season. This first week of August is traditionally a peak back-to-school shopping week, but instead sales revenue of back-to-school general merchandise took a dip, falling below last year and pre-pandemic 2019 levels.
“Consumers are holding off on making some of their purchases, which will cause more of the back-to-school retail sales to occur after the traditional shopping period,” said Cohen, “Back-to-school shopping isn’t absent, but the season will be tardy, with more sales hitting in late August, September, and even October.”