US May retail sales indicate early signs of stabilisation: Circana

Consumers appear to have adjusted their spending habits, with price pressures beginning to moderate. This shift is enabling consumers to make purchases they had previously postponed.

Marshal Cohen, chief retail industry advisor for Circana, commented, "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. The good news is that if the price is right, the consumer will bite."

A recent survey revealed that 40 per cent of consumers made immediate purchases due to discount offers. Over 80 per cent stated they would buy a product if the current price was favourable compared to typical pricing, with urgent need ranking as the second highest motivator for immediate purchases.

Notably, consumers aged 55 and older have shown consistent spending strength, being the only age group to increase their expenditure on discretionary general merchandise. Their average monthly spending has risen by 4 per cent in the first four months of 2024, with significant growth observed in the home improvement, apparel, auto aftermarket, and prestige beauty sectors. In contrast, all other age groups combined experienced a 2 per cent decline in spending. Younger consumers, particularly Gen Z and Millennials, are facing increased financial pressures, impacting their spending capacity.

"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."

Fibre2Fashion News Desk (KD)