Circana: Consumer spending flattens to start year after holiday jump
The final few weeks of 2024 saw consumers increasing their spending to meet holiday needs.
New data from Circana reveals that in the five-week period ending Jan. 4, 2025, there was a 9% increase in discretionary retail dollar sales and 5% growth in unit demand compared to the same period a year ago. The December growth was partly a result of the shift of Cyber Week to December from the November timing in 2023.
The final results of the core U.S. holiday shopping season, beginning with Black Friday and carrying through the end of the year, was a 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, also grew 2% in dollars and 1% in units.
“Economic concerns kept consumers focused on needs, and the U.S. presidential election distracted them from early season spending,” said Marshal Cohen, chief retail industry advisor for Circana. “Then, calendar shifts created an abbreviated shopping period between Thanksgiving and Christmas that renewed a sense of urgency that spilled into the additional last-minute shopping days after Super Saturday. Ultimately, the resiliency of the consumer remained strong and resulted in the moderate growth anticipated at the season’s start.”
Circana found that discretionary spending quickly shifted back to the established baseline performance in January after the holidays as consumers resumed their focus on needs and value. During combined weeks ending Jan. 11 and 18, discretionary spending was flat compared to the prior year. Major environmental events impacting the country, from a widespread winter storm and extreme cold to the ongoing Southern California wildfires, are also impacting retail. Unit demand was up 1% during the first two full weeks of the year, while retail spending on food and CPG products remains elevated over last year with unchanged demand.
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“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,” added Cohen. “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.”
