Shoppers Still Buying New Clothes Despite Budget Pressures

As consumers’ budgetary pressures prompt many to cut back on nonessential purchases, PYMNTS Intelligence research finds that shoppers still splurge on the clothing they want.

By the Numbers

“The Nonessential Spending Deep Dive Edition” of the PYMNTS Intelligence series “New Reality Check: The Paycheck-to-Paycheck Report,” created in collaboration with LendingClub, draws from a July survey of more than 3,400 U.S. consumers to understand the impact of nonessential spending on shoppers’ ability to manage expenses and put aside savings.

The results revealed that, among the 70% of retail shoppers who buy “nice-to-have” items at least sometimes, a plurality springs for clothing that they want. Thirty-six percent of those who bought nonessential, nongrocery retail items said their most recent such splurge on clothing, while the next-most popular category was health and beauty, at 19%, and 13% sprung for nice-to-have furniture or appliances.

The Data in Context

As retailer Kohl’s sees it, consumers are springing for clothes for special occasions.

“We … feel that we’re going to get the growth out of maximizing more of the dress-up product. People are looking for that,” CEO Tom Kingsbury told analysts on an earnings call earlier this month. “People are going out more, and they’re obviously wanting that kind of clothing as part of their wardrobe. They’re looking in their closet, and they don’t have that product. So, we’re going to fulfill that.”

Still, even clothing brands are feeling the impacts of ongoing economic challenges on their customers’ spending behavior.

“For fiscal year 2025, overall we expect to see cautious consumer that is mindful of discretionary purchases in light of inflation and high interest rates,” Guess CFO Markus Neubrand told analysts on a call Wednesday (March 20) discussing the company’s latest financial results.

Similarly, Lululemon is seeing U.S. shoppers spend more cautiously, sharing in its most recent earnings report that it saw only 7% comparable sales growth in the Americas versus a 43% rise internationally.