Circana: Consumers narrow spending to needs and must-haves

CHICAGO, September 14, 2026 — New insights from Circana show that U.S. consumers are narrowing their purchase decisions, focusing on products they need or strongly desire and spending less on items in between. Overall retail spending increased 0.8% in August 2026 compared to the same period last year, while unit demand declined 1.7%, according to new data from Circana, LLC, signaling continued caution among shoppers.

“Consumers are sending a clear message: Value remains paramount, but value is no longer defined by price alone,” said Kiara Barrett, head of global thought leadership at Circana. “Brands and retailers that can deliver both affordability and meaningful benefits, whether through convenience, wellness, innovation, or enjoyment, are best positioned to win.”

Consumer Resilience Shows Signs of Strain

• Retail food and beverage sales increased 0.2% during the four weeks ending August 29, while unit demand declined 1.8%.
• Nonedible consumer packaged goods (CPG) dollar sales rose 1.5%, with units down 2.2%.
• Discretionary general merchandise sales grew 1.4% in dollars, while unit demand remained flat year over year.

Consumers remain active in the marketplace but are increasingly deliberate about where and when they spend. More back-to-school shopping lagged into August, exacerbated by the shift in the timing of summer retail promotion weeks, and changes in SNAP benefits are affecting retail food and beverage purchases. Shopping windows have compressed, making the timing of promotions and value-focused offerings more important than ever.

Despite widespread spending pullbacks, consumers continue to make room in their budgets for purchases that deliver enjoyment, convenience, wellness, and emotional value. A recent Circana consumer survey found that nearly 60% of shoppers are exercising greater caution or reducing discretionary spending, while 30% remain selective yet continue spending in categories that matter most to them.

Demand remains weak across most discretionary general merchandise categories. Year-to-date through August 29, toys and prestige beauty were the only major discretionary categories to post unit growth compared with last year. However, there are bright spots across retail that demonstrate strong consumer interest, including frozen desserts, energy drinks, yoga and mat Pilates products, baking tools, beauty products, and trading cards. These categories are benefiting from consumers’ desire for affordable indulgences, personal well-being, entertainment, and connection.

“Consumers are redefining discretionary spending in such a way that successful brands will need to move beyond competing on price alone,” adds Barrett. “The opportunity lies in helping shoppers justify purchases through meaningful value, emotional benefits, innovation, and experiences that enhance everyday life.”