The latest report from Circana reveals that U.S. retail sales, encompassing both discretionary general merchandise and consumer packaged goods (CPG), have experienced a 1 percent growth. Notably, unit demand has remained steady, indicating that consumers are adapting their spending habits in response to moderating price pressures.
“The road to retail stability will be a bumpy one, as changes associated with seasonality combined with extreme year-over-year sales comps will bring more spending shifts for marketers to navigate,” said Marshal Cohen, chief retail industry advisor for Circana. “The good news is that if the price is right, the consumer will bite.”
A recent consumer survey by Circana found that 40 percent of consumers made immediate purchases due to discount offers, with over 80 percent of respondents indicating that they would buy a product if the current price were lower than the typical pricing, with an urgent need for the product ranking second in their decision-making process.
Amid all these shifts, consumers aged 55 and older consistently demonstrated their overall spending strength and continued being the only demographic to increase their spending on discretionary general merchandise. Average monthly spending among this group was up 4 percent in the first four months of 2024, with the largest retail sales revenue growth in the home improvement, apparel, auto aftermarket, and prestige beauty industries. All other age groups combined declined 2 percent.
Gen Z and younger Millennials are feeling the growing financial pressure impacting their spending ability the most.
“Manufacturers and retailers need to think hard about who they are targeting and strike the right balance,” added Cohen. “Paying attention to what different consumer groups value most in the moment, and acting on those opportunities before the moment passes, is critical to growth in the current retail environment.”
Image courtesy Alyssa Beltempo
