At our March 20 SCLA Think Tank, Don Unser, Chief Retail Strategist at Circana, shared an in-depth look at the health of the U.S. consumer and the shifting dynamics in retail and commerce. With inflation cooling but purchasing power still under pressure, Don emphasized that uncertainty is the new norm—and supply chain leaders must stay agile, informed, and connected.
Key Takeaways
Consumer Confidence Remains Fragile
The Consumer Confidence Index dropped to 92.9 in March—its lowest point in over a decade. Inflation has declined to 2.8%, but essential categories like shelter (+4.2%), food away from home (+3.0%), and medical services continue to weigh heavily on household budgets. Even with 21% wage growth since 2019, real consumer buying power remains constrained.
Discretionary Spending Pulls Back
Consumers are prioritizing essentials. Pet care, personal care, and value-tier food products remain strong, while apparel, home décor, and dining out are softening. Social commerce—particularly TikTok Shop—is emerging as a key channel, generating over $8 billion in U.S. sales in 2024–25 and reshaping how brands reach and convert.
Credit Pressure is Rising
Credit behavior reflects increasing stress: over 10.75% of credit card holders are making only the minimum payment, and late payments are climbing. Buy Now, Pay Later usage is booming, projected to hit $122 billion this year as consumers stretch budgets to maintain lifestyle basics.
Retail Landscape is Evolving
The U.S. retail sector remains robust at $3.6 trillion, but legacy business models are under strain. Store closures are accelerating, and disrupted formats like Joann’s illustrate the risk of failing to pivot. At the same time, private label and direct-to-consumer digital brands are gaining share—and faster cycle demand planning is a must.
Looking Ahead
With tariffs, wage gaps, AI-driven personalization, and social channel dominance all reshaping the commercial landscape, Don reminded us that adaptability—not predictability—is the cornerstone of competitive advantage.
Join Us in Arizona
If you’re a senior leader navigating these shifts, don’t miss the SCLA 2025 Executive Forum, happening June 9–11 in Arizona. This is the preeminent global supply chain meeting for executive leaders, where the world’s most sophisticated supply chains gather to share strategy, benchmark solutions, and support one another through disruption.
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