U.S. retail sales revenue, including discretionary general merchandise and consumer packaged goods (CPG), declined 1 percent in October 2023 compared to the corresponding month last year, and unit sales declined 2 percent.
Discretionary general merchandise spending continued with 7 percent declines in dollar and unit sales compared to last October. CPG spending gains slowed slightly from the prior month, with 1 percent growth in food and beverage and non-edible revenue compared to 2022.
Demand levels have also waned, with unit sales falling 2 percent and 4 percent in edible and non-edible segments, respectively, according to Circana.
Circana’s reported weekly sales data through October found that consumer priorities overshadow promotions despite the wave of promotional spending activity.
“The influence of the two-week fall promotional period has diminished. This year’s promotions provided a greater week-over-week sales revenue lift than last year, but unit sales of discretionary general merchandise fell 7 percent year-over-year,” the research company wrote in its report.
“The consumer desire that endured through rising prices is now falling prey to it, and the consumer’s focus has turned toward needs,” said Marshal Cohen, chief retail industry advisor at Circana. “With this needs-based mindset, consumers are now showing they’re not as focused on cutting back on how much they buy, but rather how much they spend on what they buy, and the value they are getting.”
Circana suggests that pricing plays a complex role in the consumer’s purchasing decisions.
Higher-priced products have declined more significantly than their lower-priced counterparts across dining, softlines, technology, and small appliances,” the company added. “However, little luxuries like prestige beauty products, premium chocolate and luxury beer continue to grow and win with consumers.”
Overall value for price and special sale prices reportedly grew as top reasons influencing where consumers shop for gifts in 2023, identified by more than 40 percent of holiday shoppers in Circana’s recent Holiday Purchase Intentions consumer survey.
“The quest for value is not just about getting the lowest price—there is no universal answer in the consumer value equation,” added Cohen. “As this consumer trend carries through Black Friday and the remainder of the holiday shopping season, it will be critical for marketers to turn their attention to finding the right value fit for their product and their consumers.”
Photo courtesy Banana Republic
