US Holiday Retail Sales Up 3.1%, Reveals Mastercard

A Mastercard SpendingPulse report revealed that U.S. retail sales grew by 3.1% year-over-year between the start of November and Christmas Eve. This rise was fuelled by the final run to take advantage of deals online followed by in-store purchases. The figure is lower than Mastercard’s expected forecast in September of 3.7% growth, as well as the 7.6% rise last year, reports Reuters.

According to Mastercard’s preliminary consumer-spending data report out today, even though inflation still remains an ongoing issue, holiday shoppers unhesitantly commenced with purchases by using their credit cards for online gift orders, family meals, and more.

However, these figures reported don’t take into account the sales of cars and are not controlled for inflation, which dropped to 3.1% in November from last year’s worrying sky-high rates — though the figures are still above normal.

In a news release, Michelle Meyer, Mastercard Economics Institute’s chief economist, commented that consumers purchased “in a deliberate manner.” She explained, “The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most.”

A large part of the sales came from online purchases, with online retail sales rising by 6.3%, in comparison to a 2.2% rise for in-person shopping.

However, there were some categories that saw a slump in sales, such as jewelry and electronics, which dropped by 2% and 0.4%, respectively.

So what was the cause of this rise in sales figures? One of the reasons was that retailers thought ahead and started their festive offers early, which gave consumers plenty of time to shop around for the best deals and then continue with their chosen purchases. Steve Sadove, a senior adviser at Mastercard and the former CEO of Saks Incorporated, said. “Ultimately it was about getting the most bang for your buck as consumers spent on a variety of goods and services, resurfacing spending trends from before the pandemic.”

To give a bit more background, there have been many reports lately that indicate the strength of consumer spending. Following Black Friday sales, The Washington Post reported a spend of $9.8 billion, which is up 7.5% from the previous year, and Cyber Monday reached even higher at $12.4 billion, according to Adobe Analytics.

Walmart and Amazon accelerated forward strategically with promotions throughout the whole of November to catch shoppers on the hunt for a good deal. However, analysts said that the discounts were not as attractive as last year, when retailers were forced to get rid of excess stock they were not able to sell during the pandemic.

Arun Sundaram, an analyst at CRFA Research, highlighted that many shoppers held out for Black Friday and Cyber Monday sales to spend, and then they finished off their purchases the night before Christmas. He explained, “Consumers are still spending, but they’re still price conscious and want to stretch their budgets.” He also noted that the weeks between Cyber Monday and Christmas Eve were softer in terms of expenditure, but the final weekend before Christmas was when consumers looked for “big deals.”