By Don Unser and Marshal Cohen
The Shift in Retail Consistency
Navigating a New Landscape in 2025
“The only constant in life is change.” –Heraclitus, Greek philosopher
Today, more than ever, this statement rings true for retail. Moments of retail disruption are nothing new, but there has always been a foundation of certain traditional activity that could be relied on. That foundation has been shaken, giving way to a retail environment rooted in disruption. And while some of this disruption is concerning, U.S. consumers can find aspects of it exciting.
At Circana, we translate the complexity of changing consumer behavior and retail activity into clear, focused guidance that helps our clients make confident decisions.
Right now, we’re thinking about what’s ahead for 2025. Read on to see five U.S. retail and consumer predictions so you and your business can anticipate what’s next.
“Retail dynamics are entering an era of change not seen since the online evolution of 2005. This will be more like a revolution.”
– Marshal Cohen, Chief Retail Advisor, Circana
1: Demand Cycles Go Big
Discretionary spending will become a priority again and a larger percentage of the overall consumer spend.
In 2024, share of retail spend continued shifting away from discretionary categories. Consumers’ dollars for discretionary items don’t go as far as they used to. But U.S. shoppers keep showing us just how resilient they are, even if their primary spending focus remains on needs.
Trade-down behavior and lengthened demand cycles may be employed to offset the sizable price tags of the bigger purchases that were on hold for the past few years.
52% of 2024 total retail sales dollars went to food, a 2.6% dollar growth increase over 2023. Fashion and tech lost wallet share in the same period.
Source: Circana, Checkout Omnichannel Tracking, Consumer Tracking Service, Retail Tracking Service;,CircanaBookScan™, Market Dynamics Report, DEG Estimates, CREST®, total market view MULO+ with conv & perimeter and EMI 3P
2: Hispanic Spending in Flux
Uncertainty will lead to a disruption in spending among the U.S. Hispanic population.
In 2010, Hispanics represented 16% of the U.S. population. That number grew to 20% in 2023. The growth trajectory of this demographic segment over several decades has resulted in Hispanics being the second-largest U.S. consumer ethnicity.
While Hispanic consumers’ discretionary general merchandise and non-edible consumer packaged goods (CPG) spending over the past year remained relatively steady, they gained share in retail food and beverage. This year, uncertainty may play out at retail with changes in where, what, and how they buy.
Looking back at 2016 – Shopping visits by Hispanic-dominant households in the U.S. declined 11% in November and December that year, while shopping visits across all consumers were up 5%.
Source: Circana, Checkout Tracking, general merchandise, 12ME May 2024, Jan. 2024 adjusted for the 53rd week, Consumers self-identify ethnicity
Source: Circana OmniConsumer™ Receipt Panel, 12ME May, 19, 2024, omnichannel venue, Hispanic ethnicity identified by head of household
3: Unexpected Generational Generators
Retail opportunities will emerge as generational groups embark on unexpected retail spending.
Economic dynamics and generational differences are rewriting retail’s rules.
For a long time, retail had its eye on Millennials as the pot of gold. But consumers aged 55 and older have challenged that notion. Generational spending is changing fast. Where it happens, what is purchased, and how much is spent are all in flux.
Discretionary spending among 18- to 24-year-olds over-indexes at dollar stores, off-price retailers, and specialty apparel/footwear and beauty retailers.
The 55+ consumer is less likely to shop at the latter two channels, instead favoring national chains, hardware stores, and department stores.
Source: Circana, Checkout Omnichannel Tracking, general merchandise, 12ME Dec. 2024
4: E-commerce Erupts
The e-commerce evolution in 2025 will be more like an explosion, with material changes to the market players.
This shopping channel has proven its value to consumers, but the steady growth up to this point entered new territory with the introduction of social commerce like TikTok and Instagram Shopping and upstart full-line, low-price online shopping options like Shein and TEMU. This year will bring significant disruption to the e-commerce channel, including new opportunities and, likely, casualties.
These new e-commerce segments are dismantling the barriers to entry, giving small brands just as much power as the big brands. The playing field has been leveled, creating expansive competition.
E-commerce accounted for 25% of total U.S. retail annual dollars and 58% of dollar growth in 2024.
Source: Circana, Checkout Omnichannel, Consumer Tracking Service, Retail Tracking Service, CREST®
5: Personalization Propels
Hyper-personalization at retail will scale in 2025 as technology meets consumer demands.
In a retail landscape with scarce innovation, personalization is a growth opportunity. Consumers have an appetite for the unique. It’s a moment when marketers can use technology to personalize their consumer interactions to help consumers find the specific products they seek.
Tapping into the consumer’s top priorities through personalized marketing and retail experiences will be an important source of growth in 2025.
Top consumer priorities based on 2024 retail spending growth: food exploration, home environment, health & wellness, beverages, pets, pampering yourself, fun & games, outdoor hobbies, fashion refresh, and essentials.
Source: Circana, Complete Store™, 12ME Nov. 2024
Bottom line
This year will be characterized by change. This change will bring both challenges and opportunities to retail – along with a blend of concern and excitement for consumers. The common thread through each of these five predictions for 2025 is the importance of finding new ways to reach consumers, whether through a different price or product focus, retail channels, or marketing methods, or even a new consumer set.
Interested in continuing the conversation around what’s next in retail with Don and Marshal?
Email contactus@circana.com or connect with your Circana account representative.
Contributing Thought Leaders
