Retailers can expect a delayed back-to-school shopping season as shifts in consumer spending are affecting what, when and if consumers make purchases.
Discretionary general merchandise spending continued to decline in July, with a 4% drop in dollar sales and a 7% drop in unit sales compared to the year-ago period, according to Circana, formerly IRI and The NPD Group. The declines continued into the first week of August, with another 5% year-over-year decline in sales revenue and an 8% drop in unit sales.
Overall retail sales revenue increased 2% compared to the same month last year. Unit sales declined 2%. Circana noted that the impact of elevated prices on demand was evident in CPG, with unit sales in July falling 1% and 3% respectively across edible and non-edible segments.
The established shifts in consumer spending behavior are resulting in a delayed start to the back-to-school shopping season, according to Circana. The first week of August is traditionally a peak back-to-school shopping week. But this year, BTS general merchandise sales revenue slipped, falling below last year and pre-pandemic 2019 levels.
“Consumers are holding off on making some of their purchases, which will cause more of the back-to-school retail sales to occur after the traditional shopping period,” noted Marshal Cohen, chief retail industry advisor for Circana.
Back-to-school shopping isn’t absent, he added, but the season will be late, with more sales hitting in late August, September, and even October.
“Retailers and manufacturers need to find the trigger points that will motivate the consumer to start to spend, despite reprioritization and the various economic challenges they are facing,” said Cohen.