This increase is higher than the 7.1% growth Mastercard had predicted in September, due to consumers seeking out early deals. However, this year's holiday retail sales growth is lower than the 8.5% increase seen last year due to economic factors such as high inflation, rising interest rates, and the threat of a recession.
Retailers Offer Large Discounts to Clear Excess Stock
Retailers including Amazon and Walmart in the United States offered steep discounts during the holiday season to clear excess stock and return inventory levels to normal. This led to strong demand for a variety of products, including toys and electronics, during the five days between Thanksgiving and Cyber Monday.
Sales of Electronics Drop, but Apparel and Restaurant Sales Rise
According to the Mastercard SpendingPulse report, sales of electronics dropped 5.3% over the roughly two-month period. However, sales in the apparel and restaurant categories rose 4.4% and 15.1%, respectively, helping to boost the overall number.
Online Sales Jump 10.6%
Online sales also saw an increase, jumping 10.6% in the period. This is slightly lower than the 11% increase seen last year.
Mastercard SpendingPulse Measures In-Store and Online Sales
It's important to note that the Mastercard SpendingPulse report measures in-store and online retail sales across all forms of payment, but excludes automotive sales. A separate Mastercard SpendingPulse report in late November showed that total retail sales jumped around 11% during the cyber week.