Circana: Consumers spent more on less in September amid ‘invisible inflation’
Dollar sales rose in September but unit sales were down across all retail segments.
Overall U.S. retail sales revenue across discretionary general merchandise, retail food and beverage, and non-edible consumer packaged goods was flat year over year for the five weeks ending Oct. But unit demand declined 2%.
Dollar sales gains for the month came from retail food and beverage, which rose 1%. Unit sales were down across all retail segments,
“We are in a period of ‘Invisible Inflation.’ It appears — on the surface —as though retail sales have not realized the impact of inflation, but, in reality, consumers are pulling back on the amount of product they are buying, allowing them to spend the same overall amount even though what they are buying costs more,” said Marshal Cohen, chief retail industry advisor for Circana. “Consumers no longer have the same purchasing power they had a year ago.”
The trend of diminishing demand that appeared mid-year, revealing shifts in consumer spending behavior across retail, continued in September, Circana noted, with the latest demand shifts now evident even at the macro level. Also, the financial strain on consumers is becoming more evident.
Discretionary general merchandise retail dollar sales declined 3%, and unit demand fell 6%, compared to the same period a year ago. Non-edible consumer packaged goods dollars were down 1%, while unit sales declined 4%.
“Consumer prioritization means demand and spending shifts will be fickle in their impact, making it important to pay attention to more than just the big retail picture,” advised Cohen. “Successful high-end product launches and promotional timing can alter sales at a product or category level, and create an inconsistent macro view. As marketers plan for the upcoming holiday shopping season and 2026, the keys to growth will be to emphasize the relevance of a product, and accelerate innovation — give the consumer a reason to prioritize their spending in your favor.”
