Circana is reporting that the U.S. consumer showed up for holiday shopping “in a big way” in the final weeks of 2024, but returned to pre-holiday spending behavior once the festivities ended and new distractions emerged.
In the combined five weeks ending January 4, 2025, the retail sales tracking and advisory firm reported a 9 percent increase in discretionary retail dollar sales and 5 percent growth in unit demand compared to the prior-year comparative period.
The growth in December was attributed partly to the shift of Cyber Week to December from the November timing in 2023, just one example of shifts in the calendar impacting year-over-year performance comparisons during the holiday season.
The final results of the core U.S. holiday shopping season, beginning with Black Friday and carrying through the end of the year, was a 2 percent dollar growth and a 1 percent increase in unit sales for discretionary general merchandise, according to Circana’s data. Total retail sales for the year, including discretionary general merchandise, retail food and beverage and non-edible consumer packaged goods (CPG), also grew 2 percent in dollars and 1 percent in units.
“Economic concerns kept consumers focused on needs, and the U.S. presidential election posed a distraction from early season spending. Then, calendar shifts created an abbreviated shopping period between Thanksgiving and Christmas that renewed a sense of urgency that spilled into the additional last-minute shopping days after Super Saturday,” said Marshal Cohen, chief retail industry advisor at Circana. “Ultimately, the resiliency of the consumer remained strong and resulted in the moderate growth anticipated at the season’s start.”
Circana went on to report that discretionary spending quickly shifted back to the established baseline performance in January as consumers resumed their focus on needs and value.
During the combined weeks ending January 11 and January 18, discretionary spending was down flat compared to the prior year, the company reported, with major environmental events impacting the country, from a widespread winter storm and extreme cold to the Southern California wildfires, impacting retail.
Unit demand was said to be up 1 percent during the first two full weeks of the year.
Retail spending on food and CPG products remains elevated over last year with unchanged demand.
“Consumers are taking a post-holiday spending respite, still facing higher prices on non-discretionary items, while also dealing with a new set of distractions,” added Cohen. “The consumer resiliency demonstrated by Holiday 2024 and the year’s overall retail results are a good sign for retail, but marketers need to be prepared for inevitable distractions that will impact the types of products purchased and the timing of spending as consumers continue to prioritize purchases around immediate need.”
