Retail Sales Signal Stabilization

In May, U.S. retail sales changed little compared to the year before, and during the period spanning the four weeks ending June 1, revenue grew one percent and unit demand remained level with the same time last year, according to Circana. The data indicates economic stabilization.

Consumers have adjusted their spending behavior and price pressures are moderating, making it easier for them to make purchases they have been delaying, said the company.

“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, in a statement. “The good news is that if the price is right, the consumer will bite.”

A recent consumer survey showed that 40 percent of shoppers purchased an item immediately instead of delaying it because of a discount offer. More than 80 percent of consumers also noted that they will buy a product now if the current price is a good deal compared to typical pricing, according to the report.

Amid these shifts, consumers ages 55 and older have consistently demonstrated their overall spending strength and continue to be the only age group to increase their spending on discretionary general merchandise. Average monthly spending among this age group is up 4 percent in the first four months of 2024, said Circana. All other age groups combined declined by roughly 2 percent.

Gen Z and younger Millennials are feeling the growing financial pressure, and the impact on their spending ability is apparent, according to the report.

“Manufacturers and retailers need to think hard about who they are targeting and strike the right balance,” said 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.”