Dive Brief:
- The back-to-school shopping season will be “moderate at best” with low on-unit demand and higher spend driven by pricing, according to a report from Circana on Friday.
- Overall retail sales revenue decreased 1% year over year in July, and unit sales dropped 2%, per Circana.
- Discretionary general merchandise retail dollar sales declined 4.3% for the four weeks ending Aug. 1, and unit demand dropped 3.9%, with Circana finding that shoppers are being careful with discretionary purchases and growth is more concentrated with higher-income consumers.
Dive Insight:
Macroeconomic pressures on U.S. consumers may be bubbling up through back-to-school shopping behaviors.
“Consumers are still spending, but they are increasingly doing so through prioritization rather than expansion; driven by purpose rather than promotions,” Global Head of Thought Leadership at Circana Kiara Barrett said in a statement. “Promotional activity remains important, but broad discounts alone are generating less incremental demand.”
Back-to-school shoppers are expected to focus on essentials such as school supplies and technology for the first day of school, Circana data released in July found. In comparison, consumers are planning to spread out apparel shopping throughout the year, with kids’ apparel dollar sales expected to decline 1% to 2% in Q3, driven by a unit demand drop.
Around 40% of parents expect to be more financially stressed this back-to-school shopping season compared to 2025, according to data from Omnisend last month. The survey found 45% of U.S. households plan to use buy now, pay later financing for back-to-school purchases, up from 39% last year.
Recent data from the National Retail Federation and Prosper Insights & Analytics found that shoppers are expected to spend a record $43.3 billion on K-12 students this year, up from $39.4 billion in 2025.
