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Retail Spending Cools A Bit After A Holiday Season Bump

Circana reports that 2024 saw year-over-year growth for holiday retail

christmas sales
(image credit: iStock)

2024’s holiday shopping period was great for retail in the U.S., but once the season ended, shoppers have taken a bit of a spending break. According to Circana, the five week period ending in January 4, 2025, saw a 9% increase in discretionary retail dollar sales and 5% growth in unit demand compared to the same period a year ago. The market research company points to the shift of Cyber Week from November to December as one reason such growth happened late in the year.

The holiday season, beginning with Black Friday and going through the end of 2024, saw 2% dollar growth and a 1% increase in unit sales for discretionary general merchandise. Total retail sales for the year 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. 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,” said Marshal Cohen, chief retail industry advisor for Circana. “Ultimately, the resiliency of the consumer remained strong and resulted in the moderate growth anticipated at the season’s start.”

Discretionary spending quickly shifted back to the established baseline performance in January as consumers resumed their focus on needs and value. During the weeks ending January 11 and 18, discretionary spending was down 4% compared to the prior year. Major environmental events impacting the country, from a widespread winter storm and extreme cold to the Southern California wildfires, are also impacting retail. Unit demand was down 5% and 8%, respectively, during the first two full weeks of the year. Retail spending on 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,” 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.”

 

See also: Report: Poor Visual Merchandising Cost Retailers $125 Billion In 12 Months

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