Mastercard Reports 3.1% Increase in Holiday Sales, Matching Inflation Levels

Preliminary holiday sales in the United States, spanning from November through December 25, experienced a 3.1% year-over-year increase, as reported by MasterCard Spending Pulse. These sales figures encompass a wide range of in-store and online purchases, excluding automotive transactions and encompassing various payment methods.

It is important to note that these sales figures have not been adjusted for inflation, which coincidentally averaged 3.1% for the entire month of November. The inflation data for December is slated to be unveiled on January 11.

The recorded sales figures fell at the lower end of the 3% to 4% year-over-year range projected by the National Retail Federation (NRF). Furthermore, these results failed to meet the 3.7% growth forecasted by Mastercard for the year 2022. Mastercard’s analysis revealed a notable 6.3% surge in online sales, juxtaposed with a 2.2% uptick in in-store sales compared to the previous year. Despite the rapid growth of online shopping, in-store purchases continue to dominate a significant share of the total retail expenditure.

Michelle Meyer, the chief economist at the Mastercard Economics Institute, remarked, “This holiday season witnessed a discernible increase in consumer spending behavior. The prevailing economic conditions, characterized by robust job creation and alleviated inflationary pressures, have empowered consumers to pursue products and experiences that resonate with them.”

Among the various categories, apparel emerged as a popular choice for holiday shoppers, registering a 2.4% year-over-year growth. Grocery sales also saw a modest increase of 2.1%, while the restaurant sector experienced a substantial 7.8% surge. Conversely, the electronics and jewelry segments witnessed declines of 0.4% and 2%, respectively.

Steve Sadove, a senior advisor at Mastercard and former CEO and chairman of Saks Incorporated, highlighted the early commencement of promotional activities by retailers this season. This strategic move allowed consumers ample time to scout for lucrative deals and discounts, ultimately maximizing the value of their spending across a diverse range of products and services, thereby reinstating pre-pandemic spending trends.

The fortuitous timing of Christmas falling on a Monday this year provided consumers with an extended weekend for last-minute holiday shopping endeavors, further bolstering retail performance. Notably, the National Retail Federation disclosed that approximately 142 million consumers intended to engage in shopping activities on Saturday, December 23rd, resulting in a noteworthy $47 million in sales for that day. The NRF is scheduled to release a comprehensive report on holiday sales outcomes later this month.

To provide additional context, here is a breakdown of the year-over-year holiday sales growth percentages in the United States over the past five years, as per Mastercard’s data:

  • 2023: 3.1%
  • 2022: 7.6%
  • 2021: 8.5%
  • 2020: 3%
  • 2019: 3.4%