Holiday sales jumped more than expected this year as shoppers turned to online retailers for last-minute discounts – a sign that household finances remain healthy.
Consumer spending during the holiday shopping season between Nov. 1 and Dec. 24 spiked 3.8% compared to the same period in 2023 – above forecasts of a 3.2% rise, according to a Mastercard SpendingPulse report.
The rise in spending beat last year’s 3.1% increase, as well.
“The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods,” Michelle Meyer, chief economist at Mastercard Economics Institute, said in a statement.
“Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains,” she added.
Online retail sales soared 6.7% compared to the same period last year, while in-store sales grew 2.9%.
Heading into the holiday season, many US retailers described their consumers as “selective,” “cautious” and “conservative,” and making “needs-based” purchases.
As a result, many doubled down on cutting prices and offering promotions, Bernstein analysts said earlier this month.
Target, for example, slashed prices on thousands of everyday items and popular gifts and toys to woo cash-strapped customers.
“The value-minded consumer showed up to shop at brick-and-mortar stores and e-commerce platforms, with retailers managing across both to capture attention throughout the season,” Steve Sadove, senior adviser for Mastercard and former chief executive of Saks Incorporated, said in a statement.
While the level of promotions remained consistent with last year, Sadove noted, the introduction of upgraded TVs and laptops, the growing acceptance and lower prices of lab-grown diamonds and the ongoing demand for athleisure apparel all encouraged shoppers to open their wallets.
This drove sales in the apparel, jewelry and electronics categories up 3.6%, 4% and 3.7%, respectively over last year, according to Mastercard.
Mastercard’s report excludes car sales and is not adjusted for inflation.
The increased spending this holiday season was largely driven by higher-income households, or those earning at least $100,000 annually, according to The Wall Street Journal.
With Post wires
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