In 2024, value gained popularity.
As they struggled with the high cost of rent and food, American consumers were picky about where and how they spent their money.
Wealthy consumers switched to Aldi and Walmart. Instead of dining at sit-down restaurants, patrons chose to cook at home or get takeaway. As consumers shopped online or at less expensive businesses like H&M, department stores suffered.
Additionally, many choose to update their houses with low-cost goods like frames and candles rather of engaging in pricey renovations or purchasing furniture.
In 2024, those changes altered the purchasing and dining environment. Coresight Research reported 48 U.S. retail bankruptcies as of Dec. 20, up from 25 in the same time frame last year. Additionally, according to BankruptcyData, a business that records filings, at least 22 restaurant chains filed for bankruptcy this year, the most since 2020.
The Associated Press observed the following patterns and dead ends in 2024:
WINNERS:
WALMART
The biggest retailer in the country usually does well in hard times since 60% of its sales come from foodstuffs, which are purchased at the discount store. Additionally, Walmart saw that a greater proportion of its customers were households earning $100,000 or more, similar to the Great Recession of 2008. However, corporate leaders believe they can retain those customers this time around because they have introduced more fashionable clothing and mannequins, as well as extended their online services.
Amazon
Internet giant To attract bargain-hunting customers, Amazon capitalized on its reputation as a place to find deals. Amazon Haul, a new low-cost storefront with electronics, clothing, and other items under $20, was introduced in November. Additionally, the business reported that its July Prime Day event had record-breaking sales. However, Amazon may see challenges in the upcoming year due to labor unrest in the United States and anticipated taxes on Chinese goods.
QUICK CASUAL CHAINS
For restaurant companies like Shake Shack, which serve better food than fast food but are still reasonably priced, it was a successful year. As it quickly constructed new restaurants, Cava, which specializes in fresh Mediterranean cuisine, said that its sales increased by more than 33% in the first nine months of this year. Value-conscious guests criticized Chipotle for serving lesser amounts, but the restaurant gained back customers after retraining staff to serve consistently large portions.
SELLERS OF JEANS
Sales at numerous retailers this year were driven by the wide-leg jeans silhouette, which quickly supplanted boot-cut and skinny jeans. Several companies, including Macy’s, Abercrombie & Fitch, Levi Strauss, Gap, and Stitch Fix, said that the trend significantly increased sales in the previous few months. Customers on a budget could purchase them for $29 at Walmart. Gucci sold wide-leg models at the top end for $1,200.
MCDONALD S
McDonald’s didn’t start the year off nicely. As clients became weary of inflation and opted to eat at home rather than get fast food, the company’s sales fell. However, a $5 dinner offer that was launched in June encouraged lower-class consumers to return to outlets. McDonald’s stated that more value will be added in 2025 and extended the agreement through the end of this year. Following a fall E. coli incident that sickened at least 104 people across 14 states due to raw onions in Quarter Pounder hamburgers, the fast food chain is attempting to win back its patrons.
LOSERS:
TARGET
Target has long been a popular destination for affordable, stylish clothing and household goods, but in 2024 the firm encountered difficulties. Because food and beverages account for less than 25% of Target’s sales, the retailer is more dependent on luxuries like apparel than Walmart. Analysts claim that its products has recently been in disarray, and it has long fought the reputation of being more expensive. Nevertheless, Target’s exclusive Taylor Swift merchandise attracted large crowds on Black Friday.
STARBUCKS
It was a difficult year for Starbucks. There are millions of ways to personalize drinks, making orders more complicated. Long lineups and inaccurate pickup times on the mobile app are the results of this. Customers became weary of Starbucks’ exorbitant costs and were uninterested in new products like coffee laced with olive oil. In order to help turn things around, Starbucks appointed Brian Niccol as its new CEO in the fall. However, the corporation may still suffer in 2025 as a result of worker unrest that resulted in strikes in December.
HISTORICAL RESTAURANTS
In 2024, a number of decades-old chains folded due to growing competition, shifting consumer preferences, and large portfolios of out-of-date eateries. In addition to closing dozens of stores, Red Lobster, TGI Fridays, and Buca di Beppo all declared Chapter 11 bankruptcy. Under new management, a leaner Red Lobster eventually emerged from bankruptcy, but it’s unclear if more established chains can reverse years of dwindling sales.
ESSENTIAL ITEMS
Low interest rates and stimulus benefits were used by American customers to renovate their homes and make other significant expenditures during the peak of the coronavirus pandemic. However, they withdrew last year. Retailers like Best Buy, the biggest consumer electronics shop in the country, have had difficulty because of this. They have seen a decline in sales of game consoles, home entertainment systems, and appliances. Lower sales of expensive items, especially discretionary kitchen and bathroom remodeling projects, were also reported by Home Depot and Lowe’s.
DEPARTMENT STORES
As more people shop online or at fast-fashion stores, department stores—especially those that serve middle-class consumers—have had difficulty retaining their clientele. Kohl’s, located in Menomonee Falls, Wisconsin, was one of the worst performers, reporting sales drops for the eleventh consecutive quarter this year. Tom Kingsbury, the departing CEO, recently acknowledged his merchandising errors, which included reducing the stock of popular store name brands, fine jewelry, and small sizes. In the upcoming year, those categories will be available to customers again.
Macy s said it would close 150 namesake stores over three years and open 15 higher-end Bloomingdale s. High-end Nordstrom, on the other hand, had a better than expected fiscal year due largely to soaring sales at its off-price Nordstrom Rack stores. Last week, the department store chain agreed to be acquired and taken private by Nordstrom family members and a Mexican retail group. As a private company, Nordstrom may have more leeway and less scrutiny of its efforts to reinvigorate sales.
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