Circana: Spending rises in March, but underlying pressures signal caution ahead
Appearances can be misleading when it comes to retail spending.
That’s according to the latest report from Circana, which said that U.S. retail spending grew modestly heading into spring, but consumer behavior beneath the surface remains shaped by a complex mix of economic headwinds and short-term tailwinds.
Overall U.S. retail sales increased 3.3% year over year in March, with unit demand up 1% across discretionary general merchandise, retail food and beverage and nonedible consumer packaged goods. While these increases signal continued consumer resilience, factors such as calendar shifts and changing behaviors among income groups are critical to note.
“Topline numbers appear healthy, but appearances can be misleading,” said Marshal Cohen, chief retail industry advisor for Circana.“Retailers are navigating an environment where calendar shifts, promotions, and temporary tailwinds are masking deeper vulnerabilities in consumer spending.”
March retail results were influenced in part by calendar shifts with the Easter shopping period moving into the first quarter this year, creating challenging year-over-year comparisons. Despite continued economic pressures, consumers have not pulled back uniformly. Spending responses to factors such as rising gas prices tend to lag rather than occur immediately, further complicating short-term retail analysis, according to Circana.
Lower-income consumers continue to feel the greatest strain, while growth driven by higher-income households has slowed since late 2025. More recently, middle-income consumers are also beginning to reduce discretionary spending, and that upper-income growth is slowing, creating a shift from what has been a K-shaped economy to more of a “dipping E.”
“The consumer isn’t retreating across the board, but spending patterns are changing, and income-based shifts have the potential to lead retail to a particularly challenging position,” Cohen said. “Today’s retail environment requires retailers and manufacturers to recognize when growth is driven by sustainable demand versus temporary distortion.”
Positive performance is occurring in response to seasonal promotions, price elevation tied to innovation, and shifting weather patterns, the report said. However, when those factors are combined with an increasingly distracted consumer, the pace at which retailers must adapt is significantly accelerated. It is increasingly critical for marketers to be able to identify the difference between short-term reactions and long-term behavioral shifts.
[READ MORE: Circana: Private label sales hit $330B in 2025]
“In an environment where the traditional act of shopping is fading, brands need to respond to the consumer’s evolving purchasing language, not just react,” Cohen said. “That means embracing emerging models that are rekindling impulse purchasing, such as social and agentic commerce, with a goal of creating new pathways to discovery and engagement that extend beyond price.”
