US consumer retail spending continues to rise

U.S. consumers are spending on in-person experiences again , but the expected pullback in general retail spending has not yet materialized . Once restrictions are eased, consumer demand will shift. For example, spending on spring break and hiking has increased in the U.S. as fears of the pandemic recede and restrictions ease.

According to data from the NPD Group, by the end of 2021, experiential consumption reached 91% of 2019 levels, but general retail spending on goods remained 19% above pre- pandemic levels . Some reduction in demand is obvious, with retail unit sales falling in nine of the first 10 weeks of 2022 compared to last year . However, in four of the same 10 weeks, revenue growth exceeded 5%.

Marshal Cohen, chief retail industry advisor at NPD , said that at present, there is a cautious optimism in the air, as consumers accept some new freedom restrictions while still being affected by the epidemic. If the trajectory of the epidemic continues to develop towards the epidemic state, people are likely to start consuming in unusual ways .

Consumer demand trends show that U.S. consumers appear to be moving away from pandemic lifestyles, but not yet away from pandemic -era consumption.

Accessories, beauty, apparel and other categories are seeing a boost from in-person experiences as the easing of pandemic restrictions allows consumers to engage in more in-person shopping experiences .

However, even though consumers are no longer as focused on home needs as they were in the past two years, products that have seen a surge in consumer demand due to the pandemic are still selling much better than before the pandemic, including toys, small appliances, household goods and technology.

"Retailers and manufacturers need to prepare for the multiple directional shifts in consumers that are set to occur," Cohen said.

"In addition to the growing pressure on the retail industry, political unrest, economic challenges and consumers' financial health are causing substantial disruptions to both physical and online retail as consumers shift more spending toward in-person experiences and as retail and e-commerce sales have surged over the past two years .

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