NEW YORK (AP) — Holiday sales have surged this year as U.S. spending remained resilient during the critical shopping season despite soaring prices for everything from food to rent, one measure shows.
Holiday sales rose 7.6, a slower pace than the 8.5% increase from a year earlier when shoppers started spending the money they had saved at the start of the pandemic, according to Mastercard SpendingPulse, which tracks all kinds of payments, including cash and debit cards. .
Mastercard SpendingPulse expected an increase of 7.1%. The data released on Monday excludes the auto industry and is not adjusted for inflation, which has eased somewhat but remains painfully high.
Sales in the United States between Nov. 1 and Dec. The 24th, a critical period for traders, was fueled by restaurant and clothing spending.
By category, apparel rose 4.4%, while jewelry and electronics fell around 5%. Online sales jumped 10.6% from a year ago and in-person spending increased 6.8%. Department stores recorded a modest increase of 1% compared to 2021.
“This holiday retail season was different than it was years ago,” Steve Sadove, former CEO and chairman of Saks and senior adviser to Mastercard, said in a prepared statement. “Retailers are enjoying deep discounts, but consumers are diversifying their holiday spending to accommodate rising prices and an appetite for post-pandemic experiences and festive gatherings.”
Part of the increase reflects the impact of higher prices across the board.
Consumer spending accounts for almost 70% of US economic activity, and Americans have remained resilient since inflation first spiked nearly 18 months ago. However, cracks have started to appear, as higher prices for basic necessities account for a larger and larger share of everyone’s take-home pay.
Inflation has receded from a four-decade high this summer, but it is still sapping consumer purchasing power. Prices rose 7.1% in November from a year ago, from a high of 9.1% in June.
Overall spending has slowed due to the splurges caused by the pandemic and has increasingly shifted to basic necessities like food, while spending on electronics, furniture, new clothes and other unnecessary items has decreases. Many shoppers have turned to private label products, which are generally less expensive than national brands. They went to cheaper stores like dollar chains and big box stores like Walmart.
Consumers were also waiting for offers. Stores expected more procrastinators to arrive in stores in the final days before Christmas compared to a year ago when people started shopping earlier due to a global disruption of the supply chain that has created thousands of product shortages.
“Consumers are trying to spread out their budget, and they’re evaluating and buying at different stores,” said Katie Thompson, head of consultancy Kearney’s Consumer Institute.
In November, shoppers sharply reduced their retail spending compared to the previous month. Retail sales fell 0.6% from October to November after surging 1.3% the previous month, the government announced in mid-December. Sales fell at furniture, electronics and home and garden stores.
A broader picture of how Americans spent their money will come next month when the National Retail Federation, the nation’s largest retail group, releases its combined two-month results based on November sales figures. to December from the Department of Commerce.
The trade group expects holiday sales growth to slow to a range of 6% to 8%, down from a blistering 13.5% growth a year ago.
Analysts will also dissect the fourth quarter financial results of major retailers in February.
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