Circana: Value-driven consumers spending on ‘little luxuries;’ hot sellers are…
Year-over-year discretionary and non-discretionary retail spending continued to steady into summer as consumers remained focused on value but also willing to splurge.
U.S. retail sales delivered a repeat performance of May results in June as revenue across the combined view of discretionary general merchandise and consumer packaged goods once again grew 1%, and unit demand remained level with the same time last year, according to Circana, a leading advisor on the complexity of consumer behavior. T
he steadying of unit sales, flattening average selling price comparisons, increased value options and promotional engagement are signals of continued movement toward consumer spending stabilization.
“A growing group of consumers are living with a budget and assessing the need with an eye on value,” said Marshal Cohen, chief retail industry advisor for Circana. “They are also figuring out how to save money without giving up what they really want — cutting back in one area of their budget to free up money to spend on the occasional splurge purchase.”
Hot Sellers
The desire for little luxuries and social media's influence continue to break through budgetary boundaries, according to the report.
Through the first half of 2024, the hottest sellers ranged from categories such as lip makeup and hair styling to portable beverageware and specialty kitchen appliances. Cutting back in one area of spending helps to fuel needs-based spending such auto maintenance, as well as splurge purchases like sprucing up a wardrobe, powered vehicles for the kids and taking up pickleball as a new hobby.
The appeal of innovative products remains paramount. Circana’s New Product Pacesetters 2024 report reveals consumers are most eager to try new food and beverage products such as carbonated sports and energy drinks and meal solutions.
[READ MORE: Retail sales better than expected in June]
“Consumers simply need to be given a reason to buy — a reason that resonates enough to warrant allocating part of their limited budget,” added Cohen. “Growth in the current retail climate depends on not only taking advantage of spontaneous event-based spending, but also identifying and activating on the reasons that will stimulate spending and create new sales peaks.”
