Holiday Retail Sales Rise 3.8% Despite Economic Pressures

Holiday Retail Sales Rise 3.8% Despite Economic Pressures

NEW YORK (AP) — U.S. holiday shopping sales increased 3.8% from November through Christmas Eve, surpassing expectations despite persistent inflation and a shortened shopping season, according to Mastercard SpendingPulse data released Thursday.

The growth exceeded last year’s 3.1% increase and Mastercard’s projected 3.2% rise, with the final five days accounting for 10% of total spending. The data, excluding automotive sales and unadjusted for inflation, showed strong performance across multiple retail sectors.

“The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value,” said Michelle Meyer, chief economist at Mastercard Economics Institute, noting concentrated online spending during major promotional periods.

Online sales jumped 6.7% from the previous year, while in-store purchases grew 2.9%. Clothing sales increased 3.6%, primarily driven by e-commerce. Restaurants, electronics, and jewelry sectors also posted gains, though general merchandise initially struggled with a 9% decline in early November before recovering.

Retailers faced additional challenges this season, including five fewer shopping days between Thanksgiving and Christmas. The presidential election also captured consumer attention early in the season, temporarily impacting sales.

The National Retail Federation projects total November-December sales between $979.5 billion and $989 billion, representing 2.5%-3.5% growth from 2023. This would mark a slowdown from last year’s 3.9% increase.

Recent government data showed strong auto sales driving retail growth, though spending declined at grocery stores, clothing shops, and restaurants. The latest figures suggest consumers remain resilient despite economic pressures, with holiday spending patterns closely watched as consumer activity accounts for nearly 70% of U.S. economic activity.

Retailers adapted to the compressed calendar by launching early promotions and offering significant discounts to attract shoppers. The strategy appears to have succeeded, particularly in driving online sales during key promotional periods.

The federation will release its comprehensive holiday sales analysis next month, incorporating Commerce Department data for November and December, providing a broader picture of consumer spending patterns during the crucial retail period.

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