As we wrap up another holiday season, the retail industry is celebrating a performance that has exceeded expectations. Despite a backdrop of economic uncertainties, including inflationary pressures and shifting consumer habits, this year’s holiday sales figures are showcasing resilience and adaptability. At the start of the season we heard that the consumer is hurting. However, it looks like holiday shoppers opened their wallets in search of good deals making significant purchases in apparel, electronics and jewelry. This is a sign that household finances remain healthy, but most gains were fueled by households earning $100,000 or more.
Spending during the holiday shopping period of Nov. 1 to Dec. 24 rose 3.8% over 2023, according to a Mastercard SpendingPulse report, compared to a previously forecast rise of 3.2% and topping the 3.1% increase during the same period last year.
Many retailers started their holiday promotions earlier than ever before. Shoppers took advantage of discounts as early as October, which spread out spending over several months rather than concentrating it in December alone. Big box retailers like Walmart for example, said it would continue to bring down prices through rollbacks, while rival Target said it would increase its promotional intensity as shoppers were not as engaging without promotions. The level of promotions remained consistent with last year, but the the introduction of upgraded TVs and laptops at lower price points and the ongoing demand for athleisure apparel all encouraged shoppers.
This drove sales in the apparel, jewelry and electronics categories up 3.6%, 4% and 3.7%, respectively over last year, according to Mastercard. The shift towards online shopping continued to gain momentum this year. With many consumers preferring the convenience of digital shopping due to busy schedules or ongoing health concerns, e-commerce platforms saw significant traffic and sales increase. Online sales of apparel, in particular, grew a healthy 6.7%, compared to 0.7% in stores, as shoppers scoured for deals on multiple websites.
The unexpected strength in retail sales not only provides relief for businesses, but also has positive implications for broader economic trends moving into 2025. As we look ahead with cautious optimism fueled by these promising retail figures from this holiday season, it’s clear that consumers are ready to engage with brands they trust despite lingering uncertainties.
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Wow! While this data is optimistic, I think it’s also important to look at how lower-income households are affected by rising inflation. 🤔
I think it sets up a good trade for tariff retail issues come the new year.
I feel like we maybe spent a little less this year than we usually do. I am guessing that probably isn't true even though I feel that way!
I know we did but that's because we decided to no really do gift for people this year. We ended up doing dinner and breakfasts.
That's cool. Meals are always a good way to spend time together.
Sales increase significantly during holidays and festivals, and people like to shop during these times.
People do like to shop...
My income is definitely NOT over $100,000/yr. There's a whole different story of those under the $100k.