The ‘No-Buy July’ Threat to Retailers

First it was pandemic lockdowns. Then supply-chain chaos. Then viral “cancellations” online. Then in-store crime. Now retailers are facing an unexpected challenge: No-Buy July.

Consumers are increasingly clutching their pocketbooks, with the Consumer Confidence Index dipping 5% this month. In response, shoppers’ nickeling-and-diming has coalesced around a movement: No-Buy July, which encourages them to avoid unnecessary spending for a month. Retailers are once again in a bind of uncertainty, left to decide whether to trim back their product offerings or forge ahead with planned orders. “When there’s uncertainty, companies have to make a decision,” says retail expert Craig Rowley. Too much optimism, and firms will be left with a glut of product and lose their shirts; too much pessimism, and they’ll lose market share. “The danger is in having to walk that tightrope,” he says.

For years, the principal annual no-spend month has been Frugal February. But this year, everyone from celebrity home-improvement gurus to finance influencers is hawking No-Buy July on social media. Participants create their own rules for the month, with most spending on necessities like gas and rent, but not on nice-to-haves like fashion or dining out. The movement reflects widespread consumer distress, with the Consumer Sentiment Index down 18% since December 2024. One driving factor is the US government’s May 5th resumption of collecting payments on defaulted student loans. Currently, 5.8 million loan holders are more than 90 days past due on their loans, with 1.8 million expected to default in July.

Retail experts are not surprised. “When consumers are nervous, whether from economics or politics or layoffs, they sit on their wallets,” says Rowley. To be sure, retailers will have some reprieve because of the timing: Summer vacationers, outdoor enthusiasts, and families still need to spend on things like summer camp and travel essentials. But millions of budget crunchers are planning to keep their wallets closed this month. What’s a corporation to do?

Some firms are getting ahead of No-Buy July by marketing beyond it, especially for essentials. “‘Back to school’ is being advertised now, and the kids just got out of school,” says Kim Waller, senior client partner in the Organizational Strategy practice at Korn Ferry. “It’s an accelerated marketing schedule.”

Experts advise firms to push hard on moments when consumers will buy, whether for summer travel or a July 4^th cookout. “Firms have a moment to capitalize on consumers that are ready to buy,” says Kate Shattuck, managing partner at Korn Ferry. “Companies have to be right there for that moment.” The key, experts agree, is to identify the upcoming occasions when wallets will open—say, for suntan lotion or perishables for a summer camping trip.

Counterintuitively, firms can themselves target No-Buy July shoppers, who may well be itching to open their wallets by the first week of August. That’s the time to pounce with a winning offer. “You have to have a compelling value proposition ready to go when consumers are inclined to buy,” says Tamara Rodman, senior client partner in the Culture, Change and Communications practice at Korn Ferry.  

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