Mastercard SpendingPulse estimated that this year’s holiday in-store and online retail sales grew 3.1% year over year.
Mastercard’s annual report Mastercard SpendingPulse revealed that U.S. retail sales excluding automotive increased +3.1% year over year this holiday season (from November 1 through December 24).
As for the shopping mode, online retail sales grew more significantly. They increased by 6.3% year over year. Meanwhile, in-store sales displayed a more modest +2.2% year-over-year growth.
While online spending is growing faster, in-store sales still constitute a considerably larger portion of total retail spending volume.
Segment-wise, apparel was one of the top holiday shopping categories this season, growing +2.4% YOY. The Restaurant sector was up +7.8% year over year, resurfacing spending trends from before the pandemic, while Grocery sales also went up +2.1% for the season.
“This holiday season, the consumer showed up, spending in a deliberate manner” said Michelle Meyer, chief economist at Mastercard Economics Institute. “The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most.”
However, consumer prices growing throughout the year negatively impacted some high-ticket spending categories. Thus, Electronics sales went down -0.4%, while spending in the Jewelry segment decreased by whole 2%.
Earlier surveys showed that, for many people, holiday expenses presented a challenge this year. In preparation for Christmas 2023, many Americans planned to cut back either their holiday expenses (21.4%) or other expenses to afford holiday spending (30.5%). Another 19.7% admitted they would use their credit cards and 13.1% would use buy now pay later (BNPL) schemes to cope with the seasonal cost.
Retailers took that into account, starting promotions early this season, “giving consumers time to hunt for the best deals and promotions,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated.
The pattern starts to become habitual. Thus, last year, online prices had been falling year-over-year since September. This way, by the start of the yearly shopping spree, huge discounts contributed to consumers’ purchasing power, enabling US consumers to spend a record $211.7 billion online shopping between November 1 and December 31, 2022. The number showed a robust 3.5% increase from the same period of 2021, despite the rising living costs and high inflation.
