Mastercard SpendingPulse tracks all types of payments, including cash, debit cards and credit cards. It reported Sunday that holiday sales rose 8.5% compared to a year ago. Mastercard SpendingPulse expected an 8.8% rise.
The purchases of jewelry and clothing fueled the results.
The holiday sales increased 10.7% over the 2019 pre-pandemic period.
Clothing rose 47% by category, jewelry 32% and electronics 16%, respectively. Online sales increased 11% compared to a year ago, and by 61% compared to 2019. The 21% increase in department stores over 2020 was remarkable.
Some consumers decided to stay home after omicron struck and switched their spending to ecommerce. However, sales continued to grow. “I feel really happy about how the season turned out,” Steve Sadove (senior adviser to Mastercard, former CEO of Saks Inc.) said. “When people feel uncomfortable, you’ll notice a slight pickup in online sales and a slowerdown in store performance.”
Next month, the National Retail Federation, America’s largest retail trade organization, will release its combined two-month results. These results will be based upon an analysis of December and November sales figures from Commerce Department. Analysts will also analyze the financial results of different retailers for the fourth quarter, which is due to be published in February.
Analysts had predicted a strong holiday season based on early shopping that began in October to avoid a shortage of products. After a slow year, consumers were determined to celebrate the holidays. The slowdown in retail sales in November was due in part to the early shopping. Omicron has quickly become the predominant virus in the United States and many Americans have had to cancel last-minute holiday plans due to it.
Early December, the National Retail Federation stated that holiday sales are on track to surpass its record-breaking forecasts of an 8.5% to 10.5% increase compared to last year. Holiday sales rose 8.2% in 2020 as shoppers who were not able to work during the initial part of the pandemic splurge on home and pajamas online.
According to the group, online and non-store sales will rise between 11% and 15%. These numbers do not include automobile dealers, gas stations, and restaurants. According to the group, holiday sales have experienced an average increase of 4.4% in the last five years.
NRF delivered the update in December right before omicron became more dangerous in the U.S., disrupting businesses such as restaurants and Broadway theatres. However, overall store traffic has not fallen. Some stores have reported experiencing a drop in major cities. Sensormatic Solutions reported that store traffic increased by nearly 20% over the previous year, but was down 23% from the prior pandemic year. Sensormatic’s senior retail consultant Peter McCall noted that shoppers still prefer to shop in retail stores, but they are more inclined to open-air and outlet malls than enclosed shopping centers.
Retail sales have continued rising in an economy that has hurt some retailers. Many retailers have had to increase their wages to attract and retain workers, which has increased their costs of doing business. They had to scramble to get stock onto the major U.S. ports that were still blocked.
Nevertheless, Americans also proved their resilience in other ways. Holiday shoppers were forced to pay more for essentials like food and fuel, which put pressure on their budgets. Consumer prices increased 5.7% in the past year, which is the fastest rate in 39 years. This was due to an increase in inflation, which has been a result of the holiday shopping season. Commerce Department announced the November price increase on Thursday. This follows a 5.1% increase in consumer prices for the 12 month ending October. It continues a string of annual price rises that have been higher than the Federal Reserve’s 2% inflation target.
Americans learned to adapt to product shortages by looking for alternatives if their top choice was not available or to look at other sites like eBay to locate their top brands.
Walmart and Target promised stock shelves for the holiday. But supply constraints seem to be stubborn in other places. Brian Cornell, Target CEO, recently stated to The Associated Press that clearing supply chain clogs will take many years.
