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Consumers Spending at Reduced Levels

In November 2023, U.S. retail sales revenue, including discretionary general merchandise and consumer packaged goods, declined 2 percent compared to the same month last year, and unit sales declined 3 percent, according to Circana.

Discretionary general merchandise spending declines continued with 7 percent dollar declines and a 5 percent decrease in unit sales compared to last November. CPG spending gains slowed once again, with flat food and beverage revenue performance and a 1 percent decline in nonedible item revenue compared to last year. Demand levels have also waned, with unit sales falling 2 percent and 5 percent, respectively, in edible and nonedible segments.

“Consumers have changed the way they are shopping in response to what is going on around them, focusing their shopping energy on getting what they need at a value,” said Marshal Cohen, chief retail industry advisor for Circana, in a statement. “The combination of continued price elevation, the resulting economic challenges that remain from the past few years, and the absence of newness and purchase urgency at retail have resulted in a more relaxed approach to shopping — even at the holidays.”

The consumer’s reduced spending level for discretionary general merchandise, a new baseline established earlier this year, is not being swayed or disrupted in a significant way by holiday shopping or promotional activity, according to Circana. This year’s sales revenue declined by 4 percent over both Black Friday Week and Cyber Week when compared to the same weeks last year.  

The impact of Black Friday Week and Cyber Week has faded in recent years as a result of changed buying behaviors and the extension of promotional periods.

“Holiday shopping isn’t changing consumer behavior, so retail needs to understand all aspects of spending throughout the season and make changes accordingly,” said Cohen. “This year’s holiday shopping season isn’t over yet, but the week-after-week shortfalls are leaving a lot of ground to make up, and lessons to apply when planning for next year.”

Related: November Inflation Kept its Cool; Murray's Cheese Launches Subscription Service.