Market research and analytics company Circana reported that U.S. consumers are narrowing their purchase decisions, focusing on products they need or strongly desire and spending less on items that fall 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.
“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.”
Retail food and beverage sales increased 0.2% during the four weeks ending August 29, while unit demand declined 1.8%, according to Circana. 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, according to Circana. More back-to-school shopping lagged into August, exacerbated by the shift in summer retail promotion week timing, and shifts in SNAP benefits are impacting retail food and beverage purchasing, Circana noted. Shopping windows have compressed, making the timing of promotions and value-focused offerings more important than ever, according to the market researcher.
Consumers continue to make room in their budgets for purchases that provide enjoyment, convenience, wellness, and emotional value, Circana noted. A recent Circana consumer survey found that nearly 60% of shoppers are exercising greater caution or reducing discretionary spending, while 30% remain selective but continue spending in categories that matter most to them.
Demand remains challenged 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 versus last year, Circana reported. Bright spots across retail demonstrating strong consumer interest, according to Circana, include 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 wellbeing, entertainment, and connection.
“Consumers are redefining discretionary spending in such a way that successful brands will need to move beyond competing on price alone,” Barrett said. “The opportunity lies in helping shoppers justify purchases through meaningful value, emotional benefits, innovation, and experiences that enhance everyday life.”
