The rise of the experiential consumer, and why DE&I is the future of the U.S. restaurant industry 2
So far in 2023, U.S. consumer
spending on experiences has
outpaced consumption of hard
goods. Travel spending reached
record numbers and restaurant
companies posted almost
universally positive same-store
sales in the first quarter.
The story was different in the retail sector, which signaled
stalling demand. We saw major companies such as
Walmart and Costco continue to flag significant pull
backs on discretionary spending and stronger allocation
to essentials within hard goods. A 7.5% drop in China's
exports in May 2023 suggests global demand for goods
has indeed been chilling. And many retail executives are
already forecasting sharp consumer cutbacks in apparel
and footwear for the 2023 U.S. holiday season.
Rather than chalking up the growing trend to prioritized
services spending to consumers making up for lost time
post-lockdown, we attribute recent spending patterns to a
lasting shift towards an experiential mindset. This evolution
has been in progress for a while now and will continue to
persist through a period of tightened spending.
11.2%
11.7%
11.0%
9.5%
8.1%
7.4%
8.8%
6.9%
4.7%
Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23
FIGURE 1: SPENDING IS INCREASINGLY GEARED TOWARDS NECESSITIES AND EXPERIENTIAL PURCHASES
YOY change in nominal retail (ex. Auto) spending Monthly 2023 YOY growth
Source: Mastercard Spending Pulse
3.9%
5.6%
14.2%
42.7%
15.6%
11.6%
23.5%
Apparel
Department
stores
Restaurants
Lodging
Airlines
Feb-23
Mar-23