Photographer: Christopher Dilts / Bloomberg
Photographer: Christopher Dilts / Bloomberg
US holiday season sales exceeded low expectations for the pandemic year, with online purchases increasing.
Total retail sales grew 3% in the 75-day extended holiday period, against a 2.4% forecast, according to Mastercard SpendingPulse, which tracks online retail and in-store sales across all payment methods. The figure is much better than the 3.5% drop recorded in 2008, the last recession in the United States.
“It’s a very healthy number,” given the challenges of the coronavirus pandemic, Steve Sadove, senior consultant at Mastercard and former CEO of Saks Inc., said in an interview. “It shows me that the American consumer is highly resilient.”
Online sales increased 49% over the previous year, according to Mastercard report. E-commerce now accounts for one in five dollars spent, up from about 13% of general retail spending in 2019.
This year, Mastercard measured spending over an extended vacation period, from October 11 to December 24, because many retailers started the sales season earlier to disperse the crowds. In the traditional holiday period, from early November to Christmas Eve, sales grew 2.4%, according to the report.
Home-related categories, which were outperforming throughout the pandemic, as consumers spend a lot on their homes, they grew the most. Furniture and furnishings increased 16% and home improvement products increased 14% compared to the previous year. The weakest sectors were clothing and luxury, with a decrease of 19% and 21%, respectively.
The department store’s performance was still poor due to customers’ reluctance to visit malls. Total department store retail sales fell 10% over the long season, with a modest 3% growth in online spending.
In the future, retailers should pay attention to gift card sales, a bright spot this year, which will only be recorded when they are redeemed. For shoppers, expect fewer end-of-year promotions because retailers have accumulated few stocks this year. This will benefit your profit margins, Sadove said.