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Sensor Tower · Abraham Yousef · May 2023
Cautious Consumer Weighs on 1Q23 Retail Earnings
Consumer spending and retail sales growth have been impacted by continued inflation and rising interest rates, with decelerating YoY growth since mid-2022. However, Sensor Tower's retail cohort (excluding Temu) saw a 6% YoY rise in downloads and a 7% YoY rise in MAUs in FY1 1Q232, driven by the beauty category. Pandemic winners such as Best Buy, Wayfair, and Chewy continue to struggle, while Walmart's trends remain robust with positive YoY growth in downloads and MAUs. Consumers are increasing their frequency and duration on Walmart and Amazon's apps.
Key Takeaways:
Continued elevated inflation and rising interest rates continue to weigh on consumer spending and, subsequently, on retail sales, which have seen decelerating growth YoY since mid-2022
In FY1 1Q232, downloads and MAUs for Sensor Tower’s retail cohort (ex-Temu) rose 6% and 7% YoY, respectively, per ST estimates, driven by strength in the beauty category, which has remained resilient despite inflationary pressures
Pandemic winners, including Best Buy, Wayfair and Chewy, continue to struggle, with ongoing declines in downloads and MAU YoY growth for consumer electronics, home furnishings and department stores, among others, per ST data
Marketplaces/mass merchant’s (ex-Temu) downloads fell 9% YoY, while MAUs grew 2% YoY, with much of the downward pressure stemming from softer trends at Amazon; Walmart trends remain robust with positive FY 1Q23 download and MAU growth of 3% and 9% YoY, respectively, as consumers continue to seek value for both essentials and discretionary products
As noted in ST’s May’23 report, “US Retail: CSR Insights,” consumers have increased their frequency and duration on Walmart and Amazon’s apps, with both seeing positive growth in YoY session count growth, while peers’ trends declined
For more information, request the full report from reports@sensortower.com.
