Table of Contents
CHICAGO — U.S. consumers are fine-tuning their spending behavior as they prepare for the holiday shopping season, according to a new report from Circana.
The consumer behavior advisory firm notes that in the five weeks ending October 5, retail sales across the general merchandise and consumer packaged goods (CPG) categories increased by 3% in dollars and 1% in units compared to the same period last year. Discretionary spending on general merchandise saw a slight 1% decline in dollar sales, with unit sales edging up by 1%.
“Consumers continue to demonstrate their resilience, both in their willingness to spend when the value is there and their ability to adapt to maximize that value,” said Marshal Cohen, Circana’s chief retail industry advisor.
While spending on essentials like food and beverages grew by 4%, discretionary categories like fashion saw deep declines, signaling potential pent-up demand for apparel, footwear, and accessories as the holiday season approaches. Categories such as beauty, home goods, and office supplies remained steady, with technology and toy sales showing signs of recovery after months of sluggish growth.
Retailers have already begun rolling out promotions, but Circana's data suggests that these events have a limited impact on overall sales. The report notes that consumers are pulling back on purchases before major promotions, a trend seen during both summer and fall retail campaigns over the past two years.
As the holiday shopping season looms, retailers will need to convince consumers of the importance of their purchases and offer value that matches consumers' careful spending habits.
