Consumers pulled back a bit on making discretionary purchases during the month of February.
Discretionary U.S. general merchandise retail sales revenue fell 4% in February compared to the year-ago period and unit sales were down 5%, according to Circana. (Circana is the new name of The NPD Group and Information Resources, which merged in August.).
Weekly declines have remained relatively consistent through the first two months of 2023, but the week leading up to Valentine’s Day exhibited the sharpest drop in sales so far.
“On the surface, consumer behavior has changed very little since last year, solidifying some of the overarching retail spending trends that emerged in 2022 as the new benchmark,” said Marshal Cohen, chief retail industry advisor for Circana. “But the consumer has become more loyal to value and meeting their fundamental needs, making more specific spending changes inevitable.”
Consumers spent 9% more on food and beverage products in February 2023 than they did in February 2022. However, the gap between sales-revenue and unit-sales performance is narrowing, particularly among general merchandise and non-edible consumer packaged goods.
“While some retail consistency was established last year, volatility remains as rising food and beverage prices continue to strain discretionary spending power,” said Cohen, “As demand declines are becoming more similar across all of retail, marketers should be prepared for more changes to consumer spending on the horizon.”
(This article originally appeared on HBSDealer's partner site, Chainstoreage.com)