Mastercard SpendingPulse: U.S. Retail Sales Grew +3.1%* This Holiday Season
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Examining the recent data from Mastercard SpendingPulse, the +3.1% year-over-year growth in U.S. retail sales excluding automotive during the holiday season is a positive indicator of consumer confidence and economic health. This growth, in the context of healthy job creation and easing inflation pressures, suggests that consumers are willing to spend on discretionary items, which is a critical driver of retail and service sectors. However, it is important to consider that these figures are not adjusted for inflation and real growth may be somewhat lower when accounting for price level changes.
The shift towards online retail, with sales increasing by +6.3% year-over-year, underscores the ongoing digital transformation in consumer shopping habits. This trend has implications for brick-and-mortar retailers who must adapt to an increasingly digital marketplace. The rise in in-store sales by +2.2% year-over-year, though more modest, still indicates a sustained consumer preference for physical retail experiences, which could inform retailers' strategies in omni-channel marketing and customer engagement.
The performance of specific sectors like Apparel and Restaurants highlights consumer spending patterns that favor experiences and social activities, which could drive future investments in these areas. The +7.8% year-over-year increase in restaurant sales is particularly noteworthy as it suggests a robust recovery in the hospitality industry post-pandemic. For stakeholders and investors, these trends may signal growth opportunities in these sectors.
From an investment perspective, the reported increase in retail sales during the holiday season could have positive implications for the stock performance of companies in the retail sector. Companies that have successfully capitalized on the growth of online sales or have a strong presence in high-performing categories like apparel and restaurants may see improved financial results and potentially higher stock valuations.
It is also essential to analyze the long-term sustainability of these trends. The growth in online sales is not a new phenomenon, but its acceleration suggests that companies investing in e-commerce and logistics capabilities may have a competitive advantage. Conversely, those failing to adapt may face increased pressure. Additionally, the reported early promotions by retailers could impact profit margins and investors should monitor how these strategies affect quarterly earnings and overall financial health.
Finally, while the data is encouraging for the retail sector, investors should remain vigilant of macroeconomic factors such as potential interest rate changes, geopolitical tensions and supply chain disruptions that could affect consumer spending and retail sales going forward.
The data presented provides valuable insights into current retail trends and consumer behavior. The growth in the Apparel sector by +2.4% year-over-year aligns with the industry's expectations for increased spending during the holiday season. This suggests that retailers who have invested in inventory and marketing for this category are likely to have benefited from the trend.
Similarly, the significant increase in restaurant sales by +7.8% year-over-year is indicative of a shift towards experiential spending, a trend that has been gaining momentum in recent years. This could influence future business models and marketing strategies within the food service industry, as businesses strive to capitalize on consumer demand for dining experiences.
The emphasis on early promotions and deals by retailers could indicate a more competitive landscape, where timing and marketing effectiveness are crucial for capturing consumer attention and driving sales. This strategic approach may lead to changes in how retailers plan and execute holiday sales campaigns in the future.
“This holiday season, the consumer showed up, spending in a deliberate manner,” said Michelle Meyer, Chief Economist, Mastercard Economics Institute. “The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most.”
Key retail trends this holiday season included:
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Shopping Extravaganzas In-Store & Online: Online retail sales increased +
6.3% YOY while in-store sales were up a more modest +2.2% YOY. Spending online is increasing at a faster pace than in-store, therefore taking a growing slice of the retail pie, but shopping in-store still makes up a considerably larger portion of total retail spending. -
Winter Wardrobe Wonderland: Apparel was one of the top categories for shoppers this season as consumers shopped for new outfits and upcoming holiday festivities. The sector was up +
2.4% YOY. -
Season’s Eatings: Culinary celebrations continued as family and friends gathered in restaurants to ring in the holidays. The Restaurant sector was up +
7.8% YOY, while Grocery was up +2.1% for the season.
“Retailers started promotions early this season, giving consumers time to hunt for the best deals and promotions,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “Ultimately it was about getting the most bang for your buck as consumers spent on a variety of goods and services, resurfacing spending trends from before the pandemic.”
*Excluding automotive
Mastercard SpendingPulse™
|
|
|
2023 vs. 2022 |
Total retail (ex. auto) |
+ |
E-commerce sales |
+ |
In-store |
+ |
Apparel |
+ |
Electronics |
- |
Grocery |
+ |
Jewelry |
- |
Restaurants |
+ |
Source: Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment and is not adjusted for inflation |
|
About Mastercard SpendingPulse
Mastercard SpendingPulse reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check.
Mastercard SpendingPulse defines “U.S. retail sales” as sales at retailers and food services merchants of all sizes. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included in the total retail sales figure. SpendingPulse insights are not indicative of Mastercard company performance; insights and forecast are subject to change.
About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. www.mastercard.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20231223588739/en/
Media Contact:
Alexandria Pierroz
914-260-1020 | alexandria.pierroz@mastercard.com
Source: Mastercard Investor Relations
FAQ
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