U.S. retail sales during the 2024 holiday season rose 3.8 percent over last year’s holiday season, as Americans responded to early but steady price promotions.
That’s according to data released Thursday by Mastercard SpendingPulse, which measured in-store and online retail sales, representing all payment types, for the Nov. 1 to Dec. 24 period. The data excluded automotive sales, and is not adjusted for inflation.
Mastercard’s figures are in line with forecasts during the fall from retail experts and trade organizations that predicted low- to midsingle-digit gains. Consumers focused on apparel, jewelry and electronics, where sales rose 3.6 percent, 4 percent and 3.7 percent, respectively, Mastercard indicated. Americans were also dining out more so than last year, with restaurant spending up 6.3 percent compared to last year, Mastercard reported.
“The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value, as can be seen by concentrated e-commerce spending during the biggest promotional periods,” Michelle Meyer, chief economist, Mastercard Economics Institute, said in a statement. “Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains.”
“This holiday season, we saw consumers motivated by deals and retailers respond with promotions to meet the demand,” added Steve Sadove, senior adviser for Mastercard and former chairman and chief executive officer of Saks Inc. “The value-minded consumer showed up to shop at brick-and-mortar stores and e-commerce platforms, with retailers managing across both to capture attention throughout the season.”
Mastercard also indicated that the last five days of the holiday season accounted for 10 percent of all holiday spending. Apparently, the compressed calendar — 26 days between Thanksgiving and Christmas this year versus 31 last year — sparked a surge in late gift shopping.
In other holiday trends cited by Mastercard:
- Online retail sales grew 6.7 percent year-over-year, whereas in-store sales increased 2.9 percent. Consumers increasingly preferred digital-first shopping this year, with e-commerce, curbside pick-up and delivery being “top-of-mind.”
- Apparel led in e-commerce sales, with 6.7 percent growth for online purchases compared to last year.
- Americans in some cities embraced online shopping more than in others, with e-commerce activity in Tampa, Fla., up 10.6 percent from a year ago; Phoenix was up 10 percent, and Minneapolis, Dallas, Charlotte, Orlando, Fla.,and Houston all showing high-single-digit growth in e-commerce sales.
At least one industry expert calculated that U.S. holiday sales gains were higher than what Mastercard reported. “We raised our holiday forecast to 6.2 percent growth, year-over-year, based on growth in the last couple of weeks,” said Craig Johnson, president of Customer Growth Partners. Johnson forecast 5 percent growth after Black Friday weekend, and in early October had forecast 4 percent growth.
Consumers took on more debt this year, in part due to inflation and a willingness to spend. LendingTree LLC, an online marketplace for borrowers and lenders, said Thursday that 36 percent of U.S. shoppers took on debt this holiday season, and that just more than half of that group did not expect to. LendingTree’s survey, fielded Dec. 10 to 12, showed that parents of young children were the most likely to take on debt — an average of $1,181, which is up from $1,028 in 2023. However, this year’s debt load was still below the average of $1,549 garnered in 2022.
“Inflation is still a big deal in this country, and it’s having a huge impact on people’s finances, including their holiday spending,” said LendingTree’s chief credit analyst, Matt Schulz. “While people make lots of sacrifices to deal with higher prices, many may not want to sacrifice at the holidays, so debts continue to rise.”
Lending Tree also reported that 60 percent of those who took on debt said they’re stressed about it, with 69 percent of parents of young children saying so. Additionally, 42 percent said they regret spending as much as they did, and 21 percent expect it will take five months or longer to pay it off. Another 20 percent are only making minimum payments.
Of those who took on holiday debt, 65 percent put purchases on a credit card and 24 percent on a store card. Also, 42 percent said the highest interest rate they’re paying is 20 percent or higher. Despite that, 67 percent won’t try to consolidate their debt.
