Windows of growth opportunity open as consumers reprioritize the focus of retail spending in the moment
CHICAGO, May 13, 2024 — April 2024, U.S. retail sales revenue, including both discretionary general merchandise and consumer packaged goods (CPG), declined 1% compared to the same month last year. During this period, spanning the four weeks ending April 27, 2024, year-over-year unit demand declined 2% across retail segments. While overall consumer spending levels at retail are holding relatively steady to recent trends, what consumers are spending on is changing, according to Circana™, the leading advisor on the complexity of consumer behavior.
“Retail sales have settled into a pattern of consistency in overall consumer spending where year-over-year comparisons are challenged to realize growth, or parity, in some cases, even at the traditional retail selling peaks,” said Marshal Cohen, chief retail industry advisor for Circana. “As consumers stabilize their spending, the competition for their dollars heats up. Marketers need to leap at the brief windows of opportunity created by seasonal and socially inspired consumer reprioritization that lie below the surface.”
In the week ending May 4, 2024, discretionary general merchandise retail sales revenue fell 4% from the same week last year, and unit sales declined 1%. Price elevation has created growing competition between discretionary and non-discretionary categories as consumers have needed to make financial trade-offs. Signs of spring are budding, with leisure and performance footwear and small home comfort appliances driving 5% sales revenue growth in both footwear and small appliances during the first week of May. With this renewed consumer focus toward wardrobe and lifestyle comes new opportunity, but also increased competition for discretionary categories that have enjoyed enduring growth. As a result, prestige beauty is navigating recent sales declines that have occurred rarely over the past few years.
“The current trend of consumer malaise related to purchases is one that manufacturers and retailers need to set their sights on resetting in order to return to growth,” added Cohen. “In the meantime, new opportunities to engage the consumer are making appearances, but retail must venture beyond traditional thinking to meet the consumer where they are in those moments, reengaging them before the growing field of competition does.”
