Holiday sales grew at the fastest pace in 17 years, even as shoppers grapple with higher prices, product shortages and a new COVID-19 variant raging in the final weeks of the season , according to a measure of expenditure
Holiday sales grew at the fastest rate in 17 years, even as shoppers grappled with higher prices, product shortages and a new COVID-19 variant raging in the final weeks of the season , based on a measure of expenditure.
Mastercard Spending Pulse, which tracks all kinds of payments including cash and debit cards, reported on Sunday that holiday sales were up 8.5% from the previous year. Mastercard SpendingPulse had expected a 7.4% increase.
The results, which covered November 1 to December 24, were fueled by purchases of clothing and jewelry.
Holiday sales increased 10.7% from the pre-pandemic 2019 holiday season.
By category, clothing increased by 47%, jewelry by 32%, electronics by 16%. Online sales increased 11% from a year ago and 61% from 2019. Department stores registered a 21% increase from 2020.
After the success of omicron, some consumers stayed home and shifted their spending to e-commerce, but sales remained strong. âI feel really good about the way the season has gone,â said Steve Sadove, senior advisor at Mastercard and former CEO of Saks Inc. âWhen people feel a little uncomfortable you will see a bit of a re-run and a little slowdown in store performance. ”
A bigger picture will be revealed next month when the National Retail Federation, the country’s largest retail group, releases its combined two-month results in mid-January. The results will be based on an analysis of the Commerce Department’s November and December sales figures. Analysts will also analyze the fourth quarter financial results of various retailers which are expected to be released in February.
Overall, analysts were expecting a strong holiday season, fueled by early buying that began in October in anticipation of a product shortage. Consumers were also determined to celebrate the holidays after a muted period a year ago. Yet November saw a slowdown in retail sales, in part due to early purchases. And omicron, which quickly became the dominant version of the virus in the United States, has now ruined vacation plans for many Americans who have had to cancel rallies at the last minute.
The National Retail Federation said in early December that holiday sales were on track to beat its already record forecast for an 8.5% to 10.5% increase from the period last year. Holiday sales rose 8.2% in 2020 when shoppers, stranded at the start of the pandemic, splurged on pajamas and home items, mostly online.
The group expects online and other non-store sales, which are included in the total, to increase between 11% and 15%. Figures exclude car dealerships, gas stations and restaurants. Holiday sales have grown an average of 4.4% over the past five years, according to the group.
The NRF update was released in early December, just before Omicron became a bigger threat in the United States and started disrupting businesses from Broadway theaters to restaurants. But overall store traffic has not plunged, although some stores are reporting declines in major cities. For the week ended December 18, store traffic increased nearly 20% from the previous year, but down 23% from the same week the year before. pandemic of 2019, according to Sensormatic Solutions. Peter McCall, senior director of retail consulting at Sensormatic, noted that shoppers still go to retail stores, but now prefer open-air malls and malls more than closed malls. .
Retail sales continued to increase in an economic environment that crippled some retailers. Many have had to dramatically increase wages to find and keep workers, increasing the cost of their operations. They also rushed to fill the shelves of major still-safeguarded US ports.
At the same time, Americans have proven their resilience in different ways. They have paid more for basic necessities like food and gasoline, putting pressure on vacation buyers’ budgets. In fact, consumer prices rose 5.7% in the past year, the fastest pace in 39 years, as spike in inflation confronts Americans with holiday shopping season . The November increase, announced by the Commerce Department on Thursday, follows a 5.1% increase for the 12 months ending in October, continuing a series of annual price increases that have been above target inflation rate of 2% set by the Federal Reserve.
Americans have also learned to adapt to product shortages, turning to alternatives if their best choices weren’t available, or looking to other sites like eBay to find their best brands.
Although big box retailers like Target and Walmart have promised shelves stocked for the holidays, supply constraints appear to be stubborn elsewhere. Target CEO Brian Cornell recently told The Associated Press he believes it will take several years to remove blockages in the supply chain.
AP Economics writer Marty Crutsinger contributed to this report in Washington.