By Redacción
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Value was the defining theme of 2024.
U.S. shoppers and diners were selective in how they spent their money, grappling with elevated housing and food prices. Wealthier consumers shifted their spending to budget-friendly retailers like Walmart and Aldi, while diners favored fast food or home-cooked meals over sit-down restaurants. Department stores struggled as customers turned to online shopping or budget chains like H&M.
Rather than splurging on furniture or costly renovations, many opted for affordable home updates with items such as candles and picture frames.
These changes had a profound impact on the retail and dining industries. By Dec. 20, Coresight Research recorded 48 retail bankruptcies in the U.S., nearly doubling the 25 bankruptcies filed during the same period in 2023. In the restaurant industry, 22 chains filed for bankruptcy, the highest number since 2020, according to BankruptcyData, a company that tracks filings.
Here’s a closer look at the trends that emerged — and the ones that fizzled out — in 2024:
Winners
Walmart
The nation’s largest retailer historically thrives during tough economic periods as consumers turn to its discounted groceries, which make up 60% of its revenue. In 2024, Walmart once again attracted higher-income households earning $100,000 or more annually, a pattern reminiscent of the 2008 recession. This time, Walmart executives believe they can retain these shoppers thanks to expanded online services and trendier clothing selections.
Amazon
Amazon leaned into its reputation for offering deals to capture value-driven shoppers. In November, it introduced Amazon Haul, a budget-friendly storefront featuring electronics, apparel, and other products priced under $20. Its Prime Day event in July set new sales records. However, challenges may loom in 2025, including potential tariffs on Chinese imports and domestic labor unrest.
Fast Casual Chains
Chains like Shake Shack and Cava thrived by offering affordable yet high-quality dining experiences. Cava, specializing in Mediterranean cuisine, reported a revenue surge of over 33% in the first nine months of 2024 while opening new locations. Chipotle faced criticism for smaller portions but recovered customer trust by retraining staff to ensure consistent serving sizes.
Jean Sellers
Wide-leg jeans became the must-have fashion item, boosting sales across multiple retailers. From Macy’s to Abercrombie & Fitch, Levi Strauss, and Gap, the trend was a significant driver of revenue. Budget-conscious shoppers could snag a pair for $29 at Walmart, while luxury buyers splurged on Gucci’s $1,200 versions.
McDonald’s
After a rocky start to the year due to inflation-wary customers eating at home, McDonald’s rebounded with a $5 meal deal launched in June, which appealed to lower-income diners. The promotion, extended through December, will pave the way for more value offerings in 2025. However, the fast-food giant faced challenges, including an E. coli outbreak linked to raw onions in its Quarter Pounder burgers, which sickened over 100 people.
Losers
Target
Despite its reputation for affordable yet stylish products, Target faced difficulties in 2024. Unlike Walmart, Target relies heavily on discretionary items like clothing, which account for most of its sales. Analysts noted disorganized merchandise, further hampering sales. However, exclusive Taylor Swift products helped attract shoppers during Black Friday.
Starbucks
Starbucks had a tough year as customers grew frustrated with increasingly complex drink orders and high prices. New products like olive oil-infused coffee failed to resonate with buyers, and mobile app delays led to customer dissatisfaction. Labor strikes in December compounded the challenges, leaving the company in a precarious position heading into 2025.
Legacy Restaurants
Decades-old chains like Red Lobster, TGI Fridays, and Buca di Beppo struggled to adapt to changing dining trends, filing for bankruptcy and closing numerous locations. Red Lobster emerged from Chapter 11 under new ownership, but the long-term viability of these older brands remains uncertain.
Big-Ticket Items
During the pandemic, low interest rates and stimulus checks spurred spending on home improvements and big purchases. However, that trend reversed in 2024. Retailers like Best Buy reported declines in sales of appliances, home theaters, and gaming equipment, while Home Depot and Lowe’s noted decreased demand for kitchen and bathroom remodeling projects.
Department Stores
Department stores catering to middle-income shoppers continued to lose ground as customers gravitated toward online shopping or fast-fashion retailers. Kohl’s, which reported its 11th consecutive quarter of sales declines, acknowledged mistakes in scaling back popular categories like fine jewelry and petite sizes. Macy’s announced plans to close 150 stores and focus on upscale offerings, while Nordstrom had a strong fiscal year thanks to its off-price Nordstrom Rack locations. The chain is set to go private after being acquired by the Nordstrom family and a Mexican retail group, giving it more flexibility to rebuild.
The value-driven shifts seen in 2024 will likely shape consumer habits in the coming year. As economic challenges persist, retailers and restaurants must adapt to remain competitive while catering to increasingly selective customers.
