U.S. Retail Spending Increases in Early Spring, but Consumer Pressures Signal Caution Ahead

U.S. retail spending showed modest growth heading into spring, but underneath the surface, consumer behavior remains shaped by a complex mix of economic headwinds and short-term tailwinds, according to a report from Circana LLC.

Overall, U.S. retail sales rose by 3.3 percent year-over-year in March, with unit demand up 1 percent across discretionary general merchandise, retail food and beverage, and nonedible consumer packaged goods. According to Circana, these increases signal continued consumer reliance despite rising gas prices, elevated living costs and growing financial strain among lower- and middle-income households. Key factors are calendar shifts and changing behaviors among income groups.

“Top-line numbers appear healthy, but appearances can be misleading,” said Marshal Cohen, chief retail industry adviser for Circana. “Retailers are navigating an environment where calendar shifts, promotions and temporary tailwinds are masking deeper vulnerabilities in consumer spending,” Cohen said.

March retail results were influenced partly by calendar effects, as the Easter shopping period shifted into the first quarter this year, creating challenging year-over-year comparisons. Despite continued economic pressures, consumers have not pulled back uniformly. Spending responses to factors like rising gas prices tend to lag rather than occur immediately, further complicating short-term retail analysis, Circana said.

Lower-income consumers continue to feel the greatest strain, while growth driven by higher-income households has slowed since late 2025. More recently, middle-income consumers are also starting to reduce discretionary spending, and that upper-income growth is slowing, creating a shift from what has been a K-shaped economy to more of a “dipping E,” according to the research note.

“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. However, when those factors are combined with an increasingly distracted consumer, the pace at which retailers must adapt is significantly accelerated, according to Circana. It is increasingly critical for marketers to be able to identify the difference between short-term reactions and long-term behavioral shifts.

“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 engagements that extend beyond price.”