Circana data points to new retail ‘reality’ in what drives shoppers to spend
Today’s shoppers need more than promotions to spend.
New data from Circana shows that spending growth is being driven less by promotional events and more by shoppers making deliberate purchases based on need — a trend that is shaping the back-to-school season and could influence holiday shopping in the months ahead, the company said.
“Consumers are still spending, but they are increasingly doing so through prioritization rather than expansion; driven by purpose rather than promotions,” said Kiara Barrett, global head of thought leadership at Circana. “Promotional activity remains important, but broad discounts alone are generating less incremental demand.”
Recent spending patterns, including those related to back-to-school shopping, demonstrate the shift in the consumer’s mindset. They are continuing to shop as needs arise rather than concentrating purchases around major promotional events. The result is a more measured shopping season, according to Circana, with shoppers balancing value-seeking behavior against essential purchasing needs. June promotions successfully pulled some overall retail demand forward, but did not have the same impact on back-to-school shopping.
For the four weeks ending Aug. 1, non-edible consumer packaged goods dollars were down 0.9%, and unit sales fell 3.6%. Discretionary general merchandise retail dollar sales decreased 4.3%, and unit demand dropped 3.9% compared to the same period a year ago.
Circana anticipates that the traditional back-to-school shopping season will be moderate at best: low on unit demand, with higher spending driven by pricing. Consumers will be more focused on the core elements, making deeper purchases as the needs arise even well beyond the first days of school, with even the highest-income groups exhibiting some caution.
“As marketers look toward the holiday shopping season, the back-to-school experience offers an important lesson: promotions alone may not be enough to stimulate demand,” advised Barrett. “Retail success depends on reaching the right shopper with the right product, the right offer, and in the right channel — all at the moment of need.”
