NEW YORK — Total retail sales this past holiday selling season increased 4.9% compared to 2016 and set a new record for total dollars spent, according to “Mastercard SpendingPulse” study results. That represents the largest year-over-year gain since 2011, the report found. Online shopping increased by 18.1%.
The study details shopping activity that occurred from November 1 through December 24, and it covers retail sales (excluding automotive) across all payment types, including cash and check, according to Mastercard.
“Evolving consumer preferences continued to play out in the aisles and online sites of retailers across the U.S. Overall, 2017 was a big win for retail,” says Sarah Quinlan, senior vice president of market insights at the company. “The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.”
Among the study’s key findings:
• Sales of electronics and appliances increased 7.5%, the strongest growth of the last 10 years.
• The home furniture and furnishings category grew 5.1%, as did home improvement.
• Specialty apparel and department stores, which traditionally see the bulk of sales happen in-store, generated moderate gains. That is particularly impressive given recent store closings.
• Retailers’ heavy early-season promotions paid off, with the first three weeks of November seeing significant jumps in business.
• Shoppers were still spending late into the season, with December 23 ranking second only to Black Friday in terms of single-day spending. This late shopping surge was a boon to some categories. Jewelry sales, for instance, grew 5.9%, largely driven by last-minute sales.
E-commerce continued to maintain its appeal, with half of last-minute shoppers purchasing gifts online.
“Similar to what we saw over Thanksgiving weekend, consumers were leveraging their smartphones to guide them on their purchases for the holidays,” notes Phil Rist, executive vice president of strategy at Prosper. “Retailers needed to offer great deals online and encourage young people making purchases through their smartphones to take advantage of offerings such as buy online and pick up in-store.”
Some retailers, including such Walgreens, had stores open on Christmas Eve and Christmas Day. Customers also had the option to order gifts and products online at Walgreens.com by December 20 to guarantee delivery in time for the holiday. “With an elevated product assortment, including many gifts under $20, Walgreens looks to make it easy to be holiday ready,” notes Heather Hughes, divisional vice president and GMM of seasonal and general merchandise.
The National Retail Federation in October had forecast a sales increase of 3.6% to 4% for this holiday season. In mid-December, it said that retail sales in November had risen 0.9% over October on a seasonally adjusted basis and were up 6% year-over-year unadjusted. Those results suggested that holiday sales were on track to meet the group’s forecast.
“The combination of job and wage gains, along with elevated consumer confidence has led to solid holiday spending by American households,” NRF chief economist Jack Kleinhenz commented at the time. A greater willingness to spend “will continue to be an economic driver of growth into 2018.”