Mastercard: Holiday sales up 3.1%, on par with inflation

Preliminary U.S. holiday sales between Nov. and Dec. 25 rose 3.1% year-over-year, according to MasterCard Spending Pulse. The sales exclude auto purchases and include in-store and online purchases using all forms of payment.

Sales are not adjusted for inflation, which also averaged 3.1% overall for November. December inflation numbers will be reported Jan. 11.

Sales came in at the low end of the National Retail Federation’s (NRF) 3% to 4% year-over-year range. Results were also below the Mastercard forecast of 3.7% growth over 2022. Mastercard reports online sales increased 6.3%, while in-store sales were up 2.2% from a year ago. The company noted that while shopping online is increasing faster than in-store,  shopping in-store still makes up a considerably larger portion of total retail spending.

“This holiday season, the consumer showed up, spending in a deliberate manner,” said Michelle Meyer, chief economist at 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.”

Apparel was one of the top categories for holiday shoppers, with the sector up 2.4% year-over-year, according to Mastercard. Grocery sales rose 2.1% year over year and the restaurant sector was up 7.8%. Electronics and jewelry were the only categories that saw year-over-year decreases, down 0.4% and 2%, respectively.

“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.”

He said retailers were helped this year by the fact that Christmas fell on a Monday, giving consumers an entire weekend to do last-minute holiday shopping.

NRF reported about 142 million consumers said they planned to shop on Saturday, Dec. 23rd, with sales totaling $47 million for the day. The NRF will report its holiday sales results later this month.

Following are the U.S. year-over-year holiday sales gain by percentage for the past five years, according to Mastercard.
2023: 3.1%
2022: 7.6%
2021: 8.5%
2020: 3%
2019: 3.4%