Mastercard: U.S. holiday sales to grow 3.2% as consumers focus on deals
Inflation is cooling, but consumers will continue to expect — and demand — promotions and discounts this holiday season.
That’s one of the takeaways from Mastercard Economics Institute’s Holiday Forecast for the 2024 season (Nov. 1 to Dec. 24), which predicts that overall retail spending (excluding automotive) will grow 3.2% year-over-year this holiday season with a 7.1% bump from online sales. The report includes sector insights from Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment key.
The 2023 consumer concentrated spending during promotional moments last holiday season, searching for — and receiving — discounts, the report noted. Because Christmas fell on a weekend, there was some last-minute shopping and a rush of spending right into the holiday. The 2024 holiday shopper will likely be using a similar playbook as last year, making choices and looking for the best deals, but may be feeling slightly more “stretched,” according to Mastercard, but other factors will also be at play.
The “calendar effect” is one of the key trends for retailers to watch for as the holiday shopping season approaches. With Thanksgiving (Nov. 28) falling five days later than last year, there could be some volatility with year-over-year comparisons, the report noted.
“It may also encourage retailers to start promotions earlier rather than concentrating them during the Black Friday weekend and it could push more holiday shopping into December, especially online,” the report said.
[READ MORE: Walmart starting its holiday promotions earlier than ever this year]
Other insights from the Mastercard forecast are below.
•With lower borrowing costs, lower prices and replacements of early-pandemic tech purchases, electronics sales are predicted to increase by 6.7% this season.
•Online apparel sales to increase by 4.5% year-over-year and in-store by 2.0% year-over-year.
•The price may be right for many categories of 2024 holiday purchases. Prices for typical holiday items, including electronics and appliances, apparel, sporting goods, personal care products and jewelry, have been either declining or increasing only modestly over the last year. The renewed moderation in prices should incentivize consumers to purchase more goods.
•In general, the Mountain and Sunbelt states have experienced strong in-migration and have healthier economies with greater business formation and job creation. But the trajectory has been more challenging in parts of the Northeast and Midwest. Of course, there are always exceptions to a broad trend and the situation can differ by state, county and even zip code.
