Discretionary general merchandise retail sales in the U.S. fell 7 percent in March from a year earlier, and unit sales fell 8 percent, double the average monthly declines in January and February. These steeper sales declines remained consistent during the last three weeks of March, spanning both units and dollars for the first time this year, according to advisory firm Circana, formerly IRI and The NPD Group.
“Consumers are beginning to spend less on both discretionary and essential purchases with more consistency,” said Marshal Cohen, Chief Retail Industry Advisor for Circana. “In order to create some spending elevation, there needs to be new products and new ways of thinking to reflect the changed consumer behavior and retail landscape.”
Investment in new product development was put on hold due to uncertainties caused by the pandemic, with most companies adjusting priorities to fulfill demand, address supply chain issues and focus on selling excess inventory. Before the pandemic, new general merchandise products represented more than 5% of the market. By the end of 2022, that number was less than 2%.
“One of the biggest retail casualties of the pandemic has been the availability of new and refreshed products for consumers, and now economic uncertainty is putting even more pressure on the consumer’s interest in spending,” said Cohen. “Manufacturers and retailers need to broadcast their value and prove their worth to the consumer now, in order to avoid a downward spiral later.”
Click here for more from the Circana report.
