More than eight in 10 consumers are planning to reduce spending over the next three to six months, according to a new report from The NPD Group.
NPD officials said shopper demand for products has become less predictable than conditions retailers and suppliers dealt with over a two year period dating back to the start of the pandemic. They noted the traditional Memorial Day retail ramp-up didn’t materialize this year and year-over-year unit declines are increasingly volatile.
In May, U.S. dollar sales of discretionary general merchandise were 2% lower than 2021, while unit sales were 8% lower. However, when compared to pre-pandemic levels, dollar sales were up 18% over 2019, but unit demand declined by 1%.
Dollar sales for the week ending June 11 were down 7% from the comparable week in 2021, with unit sales down 10%. Compared to pre-pandemic results, dollar sales for the week increased 9% over the same period in 2019, while unit sales were down 5%. Additionally, Father’s Day dollar sales were off 6% year-over-year and unit sales were down 9%.
Consumers are also making changes to what they are buying. Categories such as apparel, technology and small appliances have each seen a drop in sales. On the upswing are categories such as beauty, accessories, auto aftermarket and office supplies.
“Change is on the way when it comes to consumer spending,” said Marshal Cohen, chief retail industry advisor for NPD. “As consumers partake in summer vacations, concerts, sporting events, and other service-based spending, general merchandise retailers must prepare for more intense competition for wallet share, but that is just part of the new pattern emerging.”