Consumers are still spending, but retail traffic data suggests they are becoming increasingly selective about where they allocate their dollars.
According to Colliers' latest retail foot traffic and sales analysis, overall retail sales increased 5.2% in May from a year earlier, while core retail sales rose 4.5%. However, much of the growth was driven by inflation, particularly a 25.4% increase in gas station sales. Excluding gasoline, retail sales growth moderated to 3.7%, while core retail volume growth slowed to just 0.2%.
The report said the data points to consumers facing growing budget pressures even as spending remains resilient.
That caution was reflected in foot traffic patterns, with consumers continuing to prioritize certain discretionary and value-oriented categories while pulling back in others.
The strongest performance came from entertainment-oriented destinations. Visits to theaters and music venues increased 12.23% year-over-year, while attractions recorded an 8.12% increase. Fitness-related destinations also remained resilient, with visits rising 2.47%.
The categories generating the strongest traffic growth also kept visitors engaged for extended periods. Consumers spent an average of more than 136 minutes at attractions and nearly 135 minutes at theaters and music venues, the longest dwell times among the retail segments tracked. By comparison, the average visit lasted 39 minutes at clothing stores and 22 minutes at grocery stores.
Consumers continued spending on discretionary retail purchases. At the upper end, clothing store visits rose 4.15% year-over-year, while department stores posted one of the strongest traffic gains among major retail categories, with visits increasing 5.64%.
Value-oriented retailers also saw strong demand. Discount and dollar stores recorded a 7.79% increase in visits, far outpacing grocery stores, which saw traffic rise just 0.8%.
The report noted that food sales increased 1.5% in May, while underlying volumes declined 0.7%, suggesting shoppers continued to seek lower-cost options even as grocery spending edged higher.
Other categories showed considerably weaker traffic growth. Furniture and home furnishings stores posted just 1.06% growth in visits, while home improvement retailers saw traffic increase only 0.56%.
Dining traffic also remained subdued. Restaurant visits increased just 0.49% year-over-year, while fast-food and quick-service restaurant traffic dipped 3.85%.
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