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Total holiday sales edge up; e-commerce soars

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NEW YORK — Overall retail sales grew modestly during the year-end holidays, although e-commerce spending boomed as many consumers opted to shop from home with COVID-19 surging anew across most of the country.

According to preliminary data collected by Mastercard Spending Pulse, retail sales (excluding automotive and fuel) for the expanded holiday season stretching from October 11 through December 25 grew 3%. Online sales, though, soared 49%. For the traditional holiday period of November 1 through December 24, total retail sales excluding automotive and gas gained 2.4% while e-commerce sales vaulted 47.2%.

“American consumers turned the holiday season on its head, redefining ‘home for the holidays’ in a uniquely 2020 way,” said Steve Sadove, senior advisor for Mastercard and former chairman and chief executive officer of Saks Inc. “They shopped from home for the home, leading to record e-commerce growth. And consumers shopped earlier than ever before.”

Not surprisingly, e-commerce claimed a significantly larger share of the overall sales mix, 19.7%, than in 2019, when it accounted for 13.4% of the holiday business. A glance at the Mastercard data by product categories and trade class highlights the extent of the swing to e-commerce and the popularity of home-related goods.

For example, total apparel sales tumbled 19.1% but increased 15.7% through the online channel. Sales of furniture and furnishings, one of the big winners of the season, climbed 16.2% overall, and leapt 31% through e-commerce. Home improvement products experienced similar success, rising 14.1% overall and skyrocketing 79.7% online. Jewelry, which slid 4.3% in total, saw digital sales expand 44.6%.

Citing data compiled by Salesforce Inc., a software provider, Digital Commerce 360 reported that digital sales in the U.S. jumped 36% to $39 billion during the first two weeks of December. According to Salesforce, omnichannel retailers offering curbside and in-store pickup options particularly benefited during the period.

However, the sharply lower levels of store traffic reported for Thanksgiving and Black Friday apparently continued into the late stages of the season. The Wall Street Journal cited data collected by Sensormatic Solutions that indicated store traffic fell 31.3% during the seven days leading up to Christmas Eve.

If the preliminary numbers from Mastercard hold up, holiday sales will likely fall short of the National Retail Federation’s forecast. NRF projected that total holiday retail sales would grow between 3.6% and 5.2% to between $755.3 billion and $766.7 billion. Online and other non-store sales were expected to grow between 20% and 30% to a range of $202.5 billion and $218.4 billion, up from $168.7 billion in 2019.

In the NRF’s Monthly Economic Review for December, chief economist Jack Kleinhenz discussed the challenges of forecasting in what he described as “the most unusual economic environment in our lifetimes,” particularly the impact of the ongoing pandemic.


ECRM_06-01-22


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