Bolstered by low gas prices and more money in American’s pockets, a robust shopping season from before Thanksgiving through Christmas has given retailers much to cheer about this year. According to Mastercard SpendingPulseTM, which provides insights into overall retail spending trends across all payment types, including cash and check, holiday sales increased 5.1 percent to more than $850 billion this year – the strongest growth in the last six years. Online shopping also saw large gains of 19.1 percent compared to 2017.
“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
The Mastercard SpendingPulse report details holiday shopping from November 1 through December 24. Key findings of the report indicate that despite weather challenges, this was a winning holiday season for retail overall; however, the story was different category by category:
Total apparel had a strong season with a growth rate of 7.9 percent compared to 2017, recording the best growth rate since 2010. The category followed through on a strong momentum that started during the back-to-school season and accelerated through fall right up to Christmas.
Home improvement spending continued to surge across the U.S. with spending during the holiday season up 9.0 percent. This trend started before the holiday season and helped the sector power through to a strong finish.
Department stores finished the season with a 1.3 percent decline from 2017. This follows two years with growth below 2 percent, some of which can be attributed to store closings. However, the online sales growth for department stores indicated a more positive story, with growth of 10.2 percent.
Electronics and appliances were down 0.7 percent. The home furniture and furnishings category grew 2.3 percent.
Poor weather did pose an issue during some primetime shopping periods. This included cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15-16, on both the East and West coasts. Conditions were also less than ideal on Friday, December 21, in the East, with storms that impacted the final run of the season.