Discretionary Spending Undergoes Changes in 2025
Even amid economic challenges such as tariffs and rising everyday expenses that are straining consumers’ discretionary budgets, foot traffic to several key retail categories continues to thrive, according to a new white paper released by Placer.ai.
Titled “What is Driving Discretionary Spending in 2025,” the report explores how certain discretionary retail categories are weathering these headwinds by offering value, accessible upgrade options, and immersive shopping experiences. Interestingly, some of the sectors showing growth represent a shift from previous market trends.
Notably, discount and dollar stores, along with off-price apparel retailers, are outperforming the field. These segments continue to appeal to consumers focused on value and the excitement of a “treasure-hunt” shopping experience. Concurrently, demand for clothing and home furnishings remains strong. Consumers are opting for affordable wardrobe updates and home décor refreshes as more manageable alternatives to major renovation or remodeling projects.
Within the apparel sector, Placer.ai highlights a divide. While off-price and luxury fashion segments are experiencing increased foot traffic, general apparel, athleisure, and department stores are facing declines. This trend is attributed to ongoing trade-down behavior among consumers seeking better value.
These findings reflect the evolving nature of discretionary spending and emphasize the importance of offering value-driven and experience-based shopping opportunities in the current retail landscape.
