What retail apocalypse?
While the disruption that has resulted in the closure of thousands of stores has been the talk of retail this year, the industry just scored its best holiday period since 2011.
That’s according to Mastercard SpendingPulse, the first firm to release its holiday recap. Sales from November 1 through December 24 expanded 4.9 percent vs. the previous year period, setting a new record for dollars spent. Mastercard tracks retail spending by all payment types.
“Overall, this year was a big win for retail,” said Sarah Quinlan, SVP of Market Insights, Mastercard, in a statement. “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.”
Some key findings from the Mastercard SpendingPulse report:
- Home goods: Electronics and appliances jumped 7.5 percent, the strongest growth of the last 10 years. The home furniture and furnishings category grew 5.1 percent, as did home improvement.
- Apparel: Despite the massive store closings affecting these channels, specialty apparel and department stores saw moderate gains.
- Heavy early-season promotions: The first three weeks of November saw significant jumps.
- Last-minute spending: December 23 ranked close to Black Friday in terms of single-day spending.
The holiday gains were attributed largely to healthy job growth, coupled with modest inflation, moderate wage boosts, consumer confidence being at an all-time high, and some timing benefits.
“You had a unique Christmas this year, which fell on a Monday,” Sucharita Kodali, at Forrester Research, told USA Today. “That means people are with their families on the days leading up to it. It’s very conducive to store shopping. This is an unusually good year where a lot of things came together to favor the stores.”
The gains in Mastercard’s survey were led by online shopping, the sector being blamed for disrupting retail in recent years. Online grew 18.1 percent over the holiday period, boosted by a late season rally. On Tuesday, Amazon boasted about a robust holiday performance, including adding more than four million Amazon Prime free trials or paid memberships in one week alone during the holiday season.
- Mastercard SpendingPulse: Retail Sales Grew 4.9 Percent this Holiday Season – Mastercard SpendingPulse
- Retailers Feel Shoppers’ Christmas Cheer – Wall Street Journal
- Retail Industry Predictions For 2018 – National Retail Federation
- The 2017 Holiday Season Could Be the Start of Retail’s Big Comeback – Fortune
- Wintry wishes come true as retail sales up 4.9 percent – Daily News
- U.S. retail holiday sales jump 4.9 percent, biggest increase since 2011 – USA Today
- Amazon Celebrates Biggest Holiday; More Than Four Million People Trialed Prime In One Week Alone This Season – Amazon
DISCUSSION QUESTIONS: What do you think drove the apparent healthy holiday gains this holiday season? Are retailers adapting better than many predicted to the overall disruption caused by the impact of online and mobile?