U.S. retail spending showed modest growth heading into spring as consumer behavior remains shaped by a mix of economic headwinds and short-term tailwinds, according to market research and analytics company Circana.
Overall U.S. retail sales increased 3.3% year over year in March, with unit demand up 1% across discretionary general merchandise, retail food and beverage, and nonedible consumer packaged goods. The gains signal continued consumer resilience despite rising gas prices, Circana concluded, noting lingering challenges from higher living costs and growing financial strain among lower- and middle-income households, as well as calendar shifts and changing behaviors across income groups.
“Topline numbers appear healthy, but appearances can be misleading,” said Marshal Cohen, chief retail industry advisor for Circana. “Retailers are navigating an environment where calendar shifts, promotions and temporary tailwinds are masking deeper vulnerabilities in consumer spending.”
March retail results were influenced in part by calendar effects, as the Easter shopping period shifted into the first quarter this year, creating challenging year-over-year comparisons, Cohen noted. Despite continued economic pressures, consumers have not pulled back uniformly, and spending responses to factors such as rising gas prices tend to lag rather than occur immediately, further complicating short-term retail analysis, he added.
Lower-income consumers continue to feel the greatest strain, while growth driven by higher-income households has slowed since late 2025, according to Circana. Middle-income consumers are also beginning to reduce discretionary spending, colluding with slowing upper-income growth to create a shift from what has been a K-shaped economy to more of a “dipping E,” Cohen indicated.
“The consumer isn’t retreating across the board, but spending patterns are changing, and income-based shifts have the potential to lead retail to a particularly challenging position,” Cohen said. “Today’s retail environment requires retailers and manufacturers to recognize when growth is driven by sustainable demand versus temporary distortion.”
Positive performance is occurring in response to seasonal promotions, price elevation tied to innovation and shifting weather patterns, according to Circana. However, when those factors are combined with an increasingly distracted consumer, the pace at which retailers must adapt accelerates significantly, Cohen noted. It is increasingly critical for marketers to distinguish between short-term reactions and long-term behavioral shifts, he added.
“In an environment where the traditional act of shopping is fading, brands need to respond to the consumer’s evolving purchasing language, not just react,” Cohen said. “That means embracing emerging models that are rekindling impulse purchasing, such as social and agentic commerce, with a goal of creating new pathways to discovery and engagement that extend beyond price.”
