Photographer: Christopher Dilts / Bloomberg
Photographer: Christopher Dilts / Bloomberg
Holiday season sales in the U.S. exceeded low expectations for the pandemic year as online shopping increased.
Total retail sales grew 3% during the extended 75-day holiday period, compared to a 2.4% forecast, according to Mastercard SpendingPulse, which tracks online and in-store retail sales through all payment methods. The number is much better than the 3.5% drop recorded during 2008, the last U.S. recession.
“It’s a very healthy number” given the challenges of the coronavirus pandemic, Steve Sadove, senior advisor to Mastercard and former CEO of Saks Inc. said in an interview. “This shows me that the American consumer is very resilient.”
Online sales rose a whopping 49% from a year ago, according to Mastercard report. E-commerce now accounts for one in five dollars invested, compared to 13% of 2019 general retail spending.
This year, Mastercard has measured spending over an extended holiday period, from Oct. 11 to Dec. 24, because many retailers began the sales season early to disperse people. Within the traditional holiday period, from early November until Christmas Eve, sales grew 2.4%, according to the report.
The categories related to the home, which have been overcoming throughout the pandemic as consumers defeated their residences, they experienced the strongest growth. Furniture and furnishings increased 16% and home improvement products increased 14% compared to a year ago. The weakest sectors were clothing and luxury, which fell by 19% and 21%, respectively.
The performance of department stores was still delayed due to the reluctance of buyers to visit shopping malls. Total retail sales in department stores fell 10% during the extended season, with modest online spending growth of 3%.
In the future, retailers should monitor gift card sales, a bright spot this year, which will only be recorded when they are exchanged. For shoppers, expect fewer year-end promotions because retailers have accumulated little inventory this year. This will benefit their profit margins, Sadove said.