Consumers and brands alike are gearing up for what’s anticipated to be the most wonderful holiday retail season on record. According to Mastercard SpendingPulse, which measures overall retail sales across all payment types including cash and check, this holiday season U.S. retail sales are anticipated to grow 7.4 percent, excluding automotive and gas. Consumers are expected to spend online at even higher rates (+7.6 percent) than last year, while in-store sales are also expected to see a rebound—growing 6.6 percent compared to 2020.
With early holiday shopping slated to begin in October again this year, retail sales for the “75 Days of Christmas,” are anticipated to grow 6.8 percent excluding automotive and gas, and e-commerce sales to grow by 7.5 percent compared to the same time period last year.
While this holiday season will continue to look different –due to geographical, economic, and household differences – there are a number of overarching trends to watch like potential supply chain and labor supply issues impacting the season. Retailers are expected to offer omnichannel promotions early on – particularly in the heavily gifted electronics, apparel, and department store sectors. Technologies like contactless and buy online, pick up in store will continue to be embraced by consumers and retailers who desire a quick and seamless experience.
Fueled in part by pent-up savings and government stimulus, consumers have the desire and the means to spend. Over the last six months, the Luxury retail and Jewelry sectors have been experiencing some of the strongest YOY and YO2Y growth; that is anticipated to continue through the holidays.
And, for the extended holiday season, e-commerce sales are expected to grow 7.5 percent YOY and 59.3 percent YO2Y – a record high for the channel.
“This holiday season will be defined by early shopping, bigger price tags, and digital experiences. Over the past two years, retailers have learned a lot about what shoppers want and need, bringing us into an exciting new age of retail resilience,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated. “Retailers have been preparing for this moment and will find innovative ways to deliver on what’s bound to be the biggest holiday shopping season yet.”
The holiday season will be a fitting end to a year marked by strong retail performance. In August, for instance, U.S. retail sales excluding automotive and gasoline increased 8.1 percent year-over-year, and 7.7 percent compared to August 2019. Online sales in August grew 8.1 percent and 82 percent respectively, compared to the same periods. This momentum was particularly evident in key gifting categories, which have experienced strong year-over-year growth, including: apparel (+75.2 percent), electronics (+12.4 percent), and department stores (+28.7 percent).