Consumers Go Out More, Buy Less
While consumers may not be sticking as close to home as they were over the past few years, they are clinging to their real and digital wallets. That’s a conclusion from new research released by Circana, formerly IRI and The NPD Group.
The latest Circana data shows that discretionary general merchandise sales at U.S. retailers dropped 7% from April 2022 to April 2023. Unit sales also slid 8% during that time frame. The April figures track with Circana’s findings from March, lending credence to the notion that consumers are adjusting behaviors as many prices remain elevated and markets are rattled by bank closures and general economic concerns. The researchers also found that non-edible CPG unit sales declined 5% while food and beverage unit sales decreased 2% last month.
[Read more: "Inflation Hits Different by Country, Category: Studies"]
At the same time, Circana’s data affirms that although consumers are in cautionary spending mode, their lifestyles are returning to on-the-go patterns. Retail sales of breakfast foods, for example, have moderated as morning meal purchases picked up at restaurants. Another indicator is an uptick in sales of makeup and sportscoats in the GM sector during the month of April. That echoes Circana research from earlier this year showing that makeup was the fastest-growing beauty category in the first quarter of 2023.
“Whether it’s the growing influence of social media, returning to the office, or just getting out to more activities and socializing, the social side of life is back,” said Marshal Cohen, chief retail industry advisor for Circana. “However, the enduring high prices of grocery items are forcing consumers to prioritize their spending decisions and make trade-offs.”
Cohen added that retailers can heed the trend of shoppers who are simultaneously feeling financially pressured and resuming hectic schedules. “Manufacturers and retailers need to understand what is taking priority for the consumer, think about how that may evolve, and be prepared to respond to the opportunities that will come with the next phase of changes,” he advised.
