After publishing the July retail results from the U.S. Census Bureau and the National Retail Federation (NRF) this past week, data aggregator and analytics from Circana suggest that based on its data for the month of July, total U.S. retail sales across the combined view of discretionary general merchandise and consumer packaged goods (CPG) continues on the path toward a state of equilibrium in July.
For the four weeks ending August 3, 2024, Circana reported that overall sales revenue remained level (flat) with the comparable four weeks last year, and unit demand declined by 1 percent.
“While both food and beverage and non-edible CPG sales revenue increased 1 percent, with generally flat year-over-year unit performance, discretionary sales remained challenged, with a 3 percent decline in dollars and a 2 percent decline in units, Circana wrote in its July report.
Consumers maintained their steady spending over the past several months despite major retail promotional events, according to Circana.
“This month’s sales results demonstrate just how adept consumers have gotten at adapting their spending behavior to stick to a budget, including taking a break in some areas,” said Marshal Cohen, chief retail industry advisor at Circana. “This apparent vacation from spending is having an impact across discretionary categories. The long-standing strong performance in beauty and the auto aftermarket is starting to level off; back-to-school shopping has yet to show up in a significant way, and challenging results for apparel, footwear and accessories demonstrate that consumers are holding off on updating their wardrobes.”
Circana reported a growing focus on finding value in new channels, as evident in the retail food and beverage revenue gains that clubs and dollar stores have captured in the first half of this year. Similar club store gains in non-edible CPG indicate related behavior there as well.
In discretionary general merchandise, Circana reported that the shifts are more about what consumers are buying than where products are prioritized based on need. Brand loyalty is tested by financial concerns and competitive product offerings across all channels.
“Consumers are shifting their dollars, not spending more, so marketers need to find ways to be the beneficiaries of these changes or risk being the victims,” added Cohen. “As fall weather approaches and looming distractions around summer activities and the election evolve, it will be important to watch how consumer spending behavior changes—because it will change.”
