May retail sales reveal early signs of spending stabilization

CHICAGO — In May 2024, U.S. retail sales, including both discretionary general merchandise and consumer packaged goods (CPG), changed very little compared to last year’s performance. During this period, spanning the four weeks ending June 1, 2024, revenue grew 1% and unit demand remained level with the same time last year. Consumers have adjusted their spending behavior and price pressures are moderating, making it easier for them to make purchases they have been delaying, according to Circana .

“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 showed 40% purchased immediately instead of delaying, because there was a discount offer. More than 8 in 10 consumers say they will buy a product now if the current price is a good deal compared to typical pricing; urgent need for a product ranked second.

Amid all of these shifts, consumers aged 55 and older have consistently demonstrated their overall spending strength and continue be the only age group to increase their spending on discretionary general merchandise. Average monthly spending among this age group is up 4% in the first four months of 2024, with the largest retail sales revenue growth occurring in the home improvement, apparel, auto aftermarket, and prestige beauty industries. All other age groups combined declined 2%. Gen Z and younger Millennials are really feeling the growing financial pressure, and the impact on their spending ability is apparent.

“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.”