CHICAGO—In March 2023, discretionary U.S. general merchandise retail sales revenue fell 7%, compared to March 2022, and unit sales fell 8%, double the average monthly declines in January and February. These steeper sales declines remained consistent during the last three weeks of March, spanning both units and dollars for the first time this year, according to a new report from Circana.

“Consumers are beginning to spend less on both discretionary and essential purchases with more consistency,” said Marshal Cohen, chief retail industry advisor for Circana, in a press release. “In order to create some spending elevation, there needs to be new products and new ways of thinking to reflect the changed consumer behavior and retail landscape.”

According to Circana, investment in new product development was understandably put on hold due to uncertainties caused by the pandemic, when most companies adjusted priorities to fulfill demand, addressed supply chain issues and then focused on selling excess inventory. Before the pandemic, new general merchandise products represented more than 5% of the market. By the end of 2022, that number was less than 2%.

“One of the biggest retail casualties of the pandemic has been the availability of new and refreshed products for consumers, and now economic uncertainty is putting even more pressure on the consumer’s interest in spending,” said Cohen, “Manufacturers and retailers need to broadcast their value and prove their worth to the consumer now, in order to avoid a downward spiral later.”