New research shows that despite Americans grappling with high prices for many goods and other basics, sales increased this year during the holiday shopping season.
Mastercard SpendingPulse, which measures all types of payments, including cash and debit cards, reports that holiday sales from early November through Christmas Eve increased 3.8%, surpassing the 3.1% growth for the same period last year. Ten percent of the expenditure was over the final five days of the season.
Because there were five fewer days between Thanksgiving and Christmas this year, retailers were even more compelled to encourage customers to buy in advance and in large quantities.
“The holiday shopping season revealed a consumer who is willing and able to spend, but driven by a search for value as seen by concentrated online spending during the biggest promotional periods,” said Michelle Meyer, chief economist at Mastercard Economics Institute.
Sales growth exceeded Mastercard SpendingPulse’s forecasted 3.2% increase for this fall. The data, which was made public on Thursday, is not inflation-adjusted and does not include the automobile sector.
Online shopping was the main driver of the 3.6% increase in clothing sales. Restaurant spending increased along with jewelry and electronics sales. In-person spending increased 2.9% and online sales increased 6.7% over the previous year.
Nearly 70% of U.S. economic activity is attributed to consumer spending, and analysts closely watch how Americans spend their money, especially during the holidays, to determine how financially stable they are.
Customers increased their spending at retail establishments last month, according to the most recent government data on consumer expenditure, which was made public on December 17. However, the majority of those improvements were driven by auto dealer sales. In areas of the southeast hit hard by Hurricane Helene in October, severe storms prompted a demand for new autos. Customers were also drawn in by the large discounts offered by numerous shopping companies.
However, while sales at restaurants, grocery stores, and clothes stores declined, the survey also suggested that consumers might be more cautious. Sales increases were minimal outside of online retailers and auto dealers.
This year’s shortened holiday shopping season and a presidential race that attracted a lot of consumer interest put further strain on retailers. According to market research firm Circana, sales of general products fell 9% in the two weeks that concluded on November 9. Although sales have been increasing, retailers will need to make up the lost revenue.
Next month, the largest retail trade group in the country, the National Retail Federation, will release its combined two-month statistics based on Commerce Department sales data from November and December, providing a more comprehensive picture of how Americans are spending their money.
According to the association, consumers would have spent between $979.5 billion and $989 billion in November and December, a 2.5%–3.5% increase over the same two-month period last year. Compared to the 3.9% increase from the holiday 2022 season to the holiday 2023 season, it would be a slower rate.
Despite a number of sales that began as early as October, retailers enjoyed a respectable start to the unofficial start of the holiday shopping season.
— The Associated Press’s Anne D. Innocenzio and Haleluya Hadero
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!