Older consumers continue to lead spending in 2024
U.S. retail sales data showed signs of spending stabilization in May, despite inconsistencies between age groups.
According to Circana, for the four weeks ending June 1, revenue grew 1% and unit demand remained level with the same time last year. Despite marginal growth, consumers have adjusted their spending behavior and price pressures are moderating, making it easier for them to make purchases they have been delaying.
“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.”
Consumers aged 55 and older have consistently demonstrated their overall spending strength according to Circiana, and were the only group to increase their spending on discretionary general merchandise in May. 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%. Circana said that Gen Z and younger millennials are continuing to feel financial pressure, leading them to cease spending.
Circana noted that a recent consumer survey showed 40% purchased immediately instead of delaying, because there was a discount offer. More than eight-in-10 consumers say they will buy a product now if the current price is a good deal compared to typical pricing, with urgent need for a product ranked second.
“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.”
The Circana spending data follows the National Retail Federation’s report that overall retail sales in May 2024 were up 0.1% seasonally adjusted month-over-month and up 2.3% unadjusted year-over-year. That compared with a decrease of 0.2% month-over-month and an increase of 2.7% year-over-year in April 2024.