Mastercard: U.S. holiday sales to rise 7.4% this year
All signs point to a bullish holiday season for retailers, online and off.
U.S. retail sales (excluding automotive and gas) are anticipated to grow 7.4% this holiday season (Nov. 1- Dec. 24), according to Mastercard SpendingPulse, which measures overall retail sales across all payment types. In-store sales are expected to see a rebound—rising 6.6% compared to 2020.
Even as consumers return to in-store browsing and shopping, they are expected to spend online at even higher rates (up 7.6%) than last year. With holiday shopping poised to get an early start, online sales for the extended (Oct. 11 – Dec. 24) holiday season are expected to grow 7.5% year-over-year and 59.3% year-over-two-years, a record high for the channel.
“This holiday season will be defined by early shopping, bigger price tags and digital experiences,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated. “Over the past two years, retailers have learned a lot about what shoppers want and need, bringing us into an exciting new age of retail resilience.”
Mastercard noted that the holiday season will be a fitting end to a year marked by strong retail performance. In August, for instance, U.S. retail sales (excluding automotive and gasoline) increased 8.1% year-over-year, and 7.7% compared to August 2019.
Online sales in August grew 8.1% and 82% respectively, compared to the same periods. The momentum was particularly evident in key gifting categories, which have experienced strong year-over-year growth, including apparel (+75.2%), electronics (+12.4%) and department stores (+28.7%).
The Mastercard SpendingPulse report also identified other trends to watch.
• Early season’s greetings: With potential supply chain and labor supply issues impacting the season, retailers are expected to offer omnichannel promotions early on – particularly in the electronics, apparel and department store sectors.
Technologies such as contactless and buy online, pick up in store will continue to be embraced by consumers and retailers who desire a quick and seamless experience.
• ‘Tis the season for splurging: Fueled in part by pent-up savings and government stimulus, consumers have the desire and the means to spend. During the last six months, the luxury retail and jewelry sectors have been experiencing some of the strongest year-over-year and year-over-2-years growth. The trend is expected to continue through the holidays.
Holiday spending in 2020 was the highest on record despite the coronavirus pandemic, according to the National Retail Federation. The 2020 season’s 8.3% growth over the year-ago period was the highest holiday growth rate in records going back to 2002.
Mastercard SpendingPulse reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.