In-store holiday shopping is expected to increase 2.9% year-over-year, according to Mastercard Spending Pulse.
The upcoming holiday season will bring a “rebalancing’ across categories, channels and sectors in line with macroeconomic trends.
That’s according to Mastercard Spending Pulse, which expects U.S. holiday sales (for the Nov. 1 to Dec. 24 period) to increase 3.7% year-over-year. (Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment and is not adjusted for inflation. It excludes automotive sales but includes restaurants.)
Consumers will shop across channels, with e-commerce expected to increase 6.7%, and in-store sales up 2.9% year-over-year.
Mastercard noted that inflationary pricing and pent-up demand, coupled with excess savings and rising wages, allowed consumers and retailers to navigate the 2022 holiday season well. But after years of inventory and spending habits being in flux, the 2023 season will bring a broader rebalancing across categories, channels, and sectors in alignment with macroeconomic trends.
“While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,” said Michelle Meyer, U.S. chief economist, Mastercard Economics Institute. “We expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles.”
Other findings from the Mastercard report are below.
•Electronics are expected to increase 6.0% year-over-year as AI, immersive experiences and digital workspaces continue to evolve the way consumers work and play. Also, consumers who purchased new gadgets during the pandemic could be looking to upgrade to the latest model.
•The restaurant sector is expected to continue its growth streak, increasing 5.4% year-over year. Groceres are expected to increase 3.9%.
*Apparel sales are expected to be up 1%.
•Jewelry sales are expected to decline 0.3%.
“This holiday season, retailers will be vying for consumer dollars,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc. “With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value-focused. “We expect the most effective holiday strategy will be to meet consumers where they are – personalized promotions to in-store experiences will be key in doing so.”