Chicago – Discretionary spending inched up in 2024, getting a big boost during the final weeks of the year.
In the combined five weeks ending Jan. 4, there was a 9% increase in discretionary retail dollar sales in the U.S. and 5% growth in unit demand compared to the same period a year ago, according to Circana, a market research and technology company.
The growth in December was partly a result of the shift of Cyber Week to December from the November timing in 2023.
Post-holiday, discretionary spending has shifted back to the established baseline performance in January, with consumers refocused on needs and value. During the weeks ending Jan. 11 and 18, discretionary spending was down 4% compared to the prior year. Unit demand was down 5% and 8%, respectively, during the first two full weeks of the year.
Circana noted that major environmental events impacting the country – including a widespread winter storm, extreme cold and the Southern California wildfires – are also impacting retail.
In January, retail spending on essentials (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,” said Marshal Cohen, chief retail industry advisor for Circana.
The final results of the core U.S. holiday shopping season, beginning with Black Friday and carrying through the end of the year, was 2% dollar growth and a 1% increase in unit sales for discretionary general merchandise.
Total retail sales for the year, including discretionary general merchandise, retail food and beverage, and non-edible consumer packaged goods (CPG), also grew 2% in dollars and 1% in units.
“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,” said Cohen.
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Credit: homeaccentstoday.com
