Consumer Behavior

Spending up, yet purchasing dipping

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August 28, 2023

While U.S. retail spending increased 2% in July, consumer purchasing is down, according to according to Circana, formerly IRI and The NPD Group.

Discretionary general merchandise spending declines continued in July with a 4% decline in dollar sales and 7% drop in unit sales compared to last July, according to a press release.

"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," Marshal Cohen, chief retail industry advisor for Circana, said in the release.

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, according to Circana.

"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," Cohen said in the release. "Back-to-school shopping isn't absent, but the season will be tardy, with more sales hitting in late August, September and even October."