U.S. consumer continue to show their resilience in the face of economic pressures, with Circana reporting a 1.3% year-over-year increase in retail spending, even as unit demand declined 1.5%. May saw a variance in performance across retail sectors, exacerbated by a rise in fuel costs.
“While gas prices have eased slightly, consumers appear to have adjusted to elevated levels, unlocking pent-up demand. The pain at the pump didn’t dampen Memorial Day spending either — the week delivered modest year-over-year growth,” said Marshal Cohen, chief retail industry advisor for Circana. “That being said, consumers may be callused to higher prices, but they’re not numb — they remain highly engaged and intentional in how they spend.”
While overall consumption remains steady, discretionary categories are showing some strain, with non-edible CPG and general merchandise experiencing more pronounced softening in unit demand. Footwear and apparel are under the greatest pressure, with declining volumes and pricing compression. Notably, private label brands now account for 49% of apparel sales revenue, signaling value-driven trade-down behavior. Across retail, unit demand will be a critical indicator moving forward, as it reveals early signals of shifting priorities and potential pullbacks.
Despite tightening budgets, consumers continue to invest in categories aligned with lifestyle and enjoyment.
- Entertainment-driven segments, such as video games and toys, recorded notable gains.
- Beauty products remain a steady driver of discretionary spending.
- Practical purchases — including automotive products, technology, and small appliances — reflect ongoing prioritization of essential needs.
These behavioral patterns mirror those observed during the pandemic, though current shifts are rooted in economic uncertainty rather than health concerns, suggesting this is the consumer’s new go-to response to external volatility.
“Resilience in consumer spending is not automatic — it must be activated,” added Cohen. “Consumers remain willing to pay a premium for quality, but they are increasingly selective. Coupled with the current digital-first environment, impulse buying is hard to come by. Success lies in the ability to transform purchase moments into compelling, destination-driven experiences that balance both enjoyment and value.”
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