The week of Amazon’s Prime Day and other big retailer promotions showed that consumers continue to spend but are purchasing less, according to The NPD Group.
U.S. sales revenue from discretionary general merchandise for the week ending July 16, 2022 was 14 percent higher than last year’s non-promotional week, and unit sales were 1 percent lower. Compared to the same week in pre-pandemic 2019, which coincided with these promotional events, sales revenue rose 17 percent, and unit sales declined 5 percent, according to The NPD Group.
“Consumers are clearly getting energized by promotions as they continue to spend, but elevated prices and the lack of promotional depth are hindering already low demand,” said Marshal Cohen, chief retail industry advisor for NPD. “The typical back-to-school kickoff provided by Prime Days and other July retail promotions did not hit all industries equally, indicating this will be another flattened retail shopping period, similar to what we’ve seen with holiday peaks year-to-date.”
Industry-level performance shows that consumers are beginning to spend on back-to-school. Demand increased during the promotional week in small appliances, beauty, and technology; however, the big back-to-school industries, including office supplies, apparel and footwear, did not get the same lift.
As of the third week in July, only 26 percent of respondents told NPD they had started back-to-school shopping. Of those who had not started, 41 percent said they were waiting for sales, and 56 percent did not plan to start back-to-school shopping until August.
Cohen said, “The growing influence of promotional activity alongside the consumer’s ‘here and now’ shopping mindset will fragment sales across industries and an extended back-to-school shopping season. Retailers and manufacturers need to monitor consumer activity across both short and long-term views to get a clear picture of how they approach spending.”
