Photographer: Christopher Dilts / Bloomberg
Photographer: Christopher Dilts / Bloomberg
US holiday sales exceeded expectations for the pandemic year as online shopping rose.
Total retail sales increased 3% over the extended 75-day holiday period, compared to a 2.4% forecast, according to Mastercard SpendingPulse, which tracks online and in-store retail sales across all payment methods. The number is much better than the 3.5% drop in 2008, the last recession in the US.
“It’s a very healthy number,” said Steve Sadove, a senior advisor for Mastercard and a former CEO of the coronavirus pandemic. Saks Inc., said in an interview. “That shows me that the American consumer is very resilient.”
Online sales increased by 49% compared to a year ago, according to Mastercard report. E-commerce is now one in five dollars spent, up from about 13% of total retail spending in 2019.
This year, Mastercard measured spending over an extended holiday period, from October 11 to December 24, as many merchants started the sales season early to disperse the crowd. During the traditional holiday period from early November to Christmas Eve, sales rose 2.4 percent, according to the report.
Categories related to the house, which were overcoming throughout the pandemic, as consumers break into their residences, recorded the strongest growth. Furniture and furnishings increased by 16%, and housing improvement products increased by 14% compared to a year ago. The weakest sectors were clothing and luxury, down 19% and 21%, respectively.
The performance of department stores remained due to the reluctance of shoppers to visit malls. Total retail sales at department stores fell 10% during the extended season, with a modest increase in online spending of 3%.
In the future, retailers should pursue sales of gift cards, a bright spot this year, which will be recorded only when they will be redeemed. For shoppers, expect fewer promotions at the end of the year as retailers have accumulated a reduced inventory this year. This will benefit profit margins, Sadove said.