Shoppers and restaurant goers in the US were picky about where and how to spend their money as they struggled with high housing and food prices.
Affluent customers switched to Walmart and Aldi. Diners opted for fast food or home-style cooking instead of sit-down restaurants. Department stores struggled as shoppers shopped online or at cheaper chains like H&M.
Residents also moved away from buying furniture or investing in expensive renovations, opting to freshen up their homes with inexpensive items like frames and candles.
These shifts will change the shopping and dining landscape in 2024. As of Dec. 20, Coresight Research tracked 48 retail bankruptcies in the U.S., up from 25 in the same period a year ago. And this year, at least 22 restaurant chains have filed for bankruptcy, the most since 2020, according to BankruptcyData, a company that tracks the records.
Here are some of the trends — and dead ends — that The Associated Press has been tracking in 2024:
WINNERS:
WALMART
The nation’s largest retailer typically shines in tough times, when shoppers turn to the discounter for groceries, which account for 60% of Walmart’s total sales. And just like during the Great Recession of 2008, Walmart saw households with incomes of $100,000 or more make up a larger share of its customer base. But this time, business leaders think they can keep those customers because they’ve expanded online services and added more stylish clothes and mannequins.
Online giant Amazon leveraged its reputation as a deals destination to appeal to shoppers hungry for bargains. In November, it launched Amazon Haul, a new discount store with electronics, clothing and other products for under $20. And the company said its Prime Day event in July resulted in record sales. But Amazon could face headwinds in the coming year from looming tariffs on products from China and labor unrest in the US
FAST CASUAL NECKLACES
It was a good year for restaurant chains like Shake Shack, which are a step beyond fast food but still offer good value. Cava, which specializes in fresh Mediterranean dishes, said sales rose more than 33% in the first nine months of this year thanks to the rapid construction of new restaurants. Chipotle received some attention from value-conscious diners about smaller portions, but pulled back customers after retraining employees to ensure “consistent and generous” portions.
JEANS SELLERS
The wide-leg jean silhouette – the “it” style that quickly replaced bootcut and skinny jeans – drove sales growth across many different retailers this year. Macy’s, Abercrombie & Fitch, Levi Strauss, Gap and Stitch Fix were among those citing the trend as a big sales booster in recent months. Price-conscious shoppers can get them at Walmart for $29. At the high end, Gucci had wide-leg versions for $1,200.
MCDONALD’S
The year didn’t start well for McDonald’s. The company’s sales fell as customers hurt by inflation opted to eat at home instead of grabbing fast food. But a $5 meal deal introduced in June helped draw lower-income customers back to stores. McDonald’s extended the deal until the end of this year and said more value will come in 2025. The fast-food giant is working to get customers back after an E. coli outbreak in the fall linked to raw onions in Quarter Pounder burgers, which sickened at least 104 people. 14 states.
Target’s cheap, chic fashion and home decor have long been a big draw, but the chain faced challenges in 2024. Unlike Walmart, Target relies more on discretionary items like clothing because less than a quarter of its sales come from food and beverages. It has always battled the perception that it is more expensive, and analysts say its merchandise has been in disarray lately. Still, Target attracted a crowd on Black Friday with exclusive Taylor Swift products.
STERBUCKS
Starbucks had a tough year. Orders are becoming increasingly complex, with thousands of ways to customize drinks. This leads to long lines and incorrect pick-up times on the mobile app. New offerings such as coffee with olive oil failed to attract customers, who were also fed up with Starbucks’ high prices. Starbucks hired a new CEO, Brian Niccol, in the fall to help turn things around. But the labor disputes, which led to strikes in December, would continue to hurt the company into 2025.
LEGACY RESTAURANTS
Decades-old chains threw in the towel in 2024 and succumbed to increasing competition, changing dining patterns and large portfolios of outdated restaurants. Red Lobster, TGI Fridays and Buca di Beppo have all filed for bankruptcy protection and closed dozens of locations. A leaner Red Lobster later emerged from bankruptcy under new ownership, but it remains to be seen whether older chains can turn around years of declining sales.
At the height of the coronavirus pandemic, U.S. consumers took advantage of low interest rates and stimulus checks to renovate their homes and make other big purchases. But last year they withdrew. That’s been a challenge for retailers like Best Buy, the nation’s largest consumer electronics chain, which posted lower sales of appliances, home theaters and gaming equipment. Home Depot and Lowe’s also reported lower sales of high-end items, especially from discretionary kitchen and bathroom remodeling projects.
Department stores
Department stores, especially those that cater to middle-income shoppers, are struggling to retain customers as many turn to online shopping or fast-fashion retailers. Among the worst performers: Menomonee Falls, Wisconsin-based Kohl’s, which reported its 11th consecutive quarter of sales declines this year. Outgoing CEO Tom Kingsbury recently admitted to making mistakes in merchandising, including scaling back fine jewelry, popular store-label brands and small sizes. Customers will see those categories return next year.
Macy’s said it would close 150 namesake stores and open 15 higher-end Bloomingdale’s over three years. Upscale Nordstrom, on the other hand, had a better-than-expected fiscal year, thanks in large part to rising sales at its budget Nordstrom Rack stores.
