Mastercard SpendingPulse: Total U.S. Retail Sales Grew 3.8%* This Holiday Season; Online Remained Choice for Consumers, Increasing 6.7% YOY

Rhea-AI Summary

Mastercard SpendingPulse reports U.S. retail sales (excluding automotive) grew 3.8% year-over-year during the 2023 holiday season (November 1 - December 24). Online retail sales increased 6.7% while in-store sales rose 2.9%.

Key sectors showed positive growth: Restaurant spending increased 6.3%, Apparel 3.6%, Jewelry 4.0%, and Electronics 3.7%. E-commerce adoption varied by region, with Tampa (10.6%) and Phoenix (10.0%) leading digital sales growth.

Consumer behavior was characterized by value-seeking, with concentrated spending during promotional periods. The last five days accounted for 10% of all holiday spending, reflecting strong consumer health supported by the labor market and household wealth gains.

Positive

• Overall retail sales growth of 3.8% YoY
• Strong e-commerce growth of 6.7% YoY
• Restaurant spending up 6.3% YoY
• Growth across multiple retail sectors (Jewelry 4.0%, Electronics 3.7%, Apparel 3.6%)
• Strong digital adoption in key markets with up to 10.6% growth

Negative

• In-store sales growth (2.9%) lagging behind e-commerce
• Consumer spending heavily dependent on promotional periods

Insights

Financial Analyst

The 3.8% YoY retail sales growth and 6.7% e-commerce expansion reveal resilient consumer spending despite inflation concerns. The data presents three critical insights: First, the concentration of spending during promotional periods indicates sophisticated price sensitivity rather than financial strain. Second, the 6.3% growth in restaurant spending alongside increased discretionary purchases in jewelry (4.0%) and electronics (3.7%) suggests healthy consumer confidence and disposable income levels. Third, the regional e-commerce growth variations, particularly in Sun Belt cities like Tampa (10.6%) and Phoenix (10.0%), highlight demographic shifts influencing retail patterns. For Mastercard, this translates to higher transaction volumes and network usage, potentially supporting revenue growth in Q4. The shift toward digital payments and e-commerce particularly benefits MA's higher-margin digital transaction services.

Market Research Analyst

The holiday spending data reveals a important evolution in consumer behavior that extends beyond mere numbers. The 10% concentration of spending in the final five days demonstrates strategic shopping patterns, with consumers maximizing promotional values while maintaining spending power. The robust growth in digital commerce, particularly in mid-sized markets, signals a permanent shift in retail dynamics. Most notably, the balanced performance across discretionary categories - apparel (3.6%), jewelry (4.0%) and electronics (3.7%) - contradicts recession fears and suggests sustained consumer confidence. The regional e-commerce growth disparities between Sun Belt cities and national averages indicate emerging market opportunities and potential demographic-driven spending shifts that could reshape retail strategies in 2024.

PURCHASE, N.Y.--(BUSINESS WIRE)-- According to preliminary insights from Mastercard SpendingPulse™, U.S. retail sales excluding automotive increased 3.8% year-over-year from November 1 through December 24. Mastercard SpendingPulse measures in-store and online retail sales, representing all payment types and is not adjusted for inflation.

Mastercard SpendingPulse U.S. Holiday Retail Sales November 1 - December 24, 2024 vs. 2023. (Graphic: Business Wire)

“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,” said Michelle Meyer, chief economist, Mastercard Economics Institute. “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.”

Key retail trends for the full holiday season included:

• The most ‘valuable’ time of the year – Empowered consumers sought value at every turn this year, responding to promotions during the November and Black Friday shopping period, and filling their baskets in the run-up to December 24. Overall retail sales saw a 3.8% increase compared to 2023, with the last five days of the holiday season accounting for 10% of all holiday spending.

• A balanced basket – Consumer demand for experiences like dining out strengthened in the holiday season, with Restaurant spending growth up 6.3% compared to last year. Additionally, this season saw an increase in spending growth on goods compared to last year, with Apparel (3.6%), Jewelry (4.0%) and Electronics (3.7%) as notable sectors for gift-giving.

• Clicking all the way – Consumers increasingly preferred digital-first shopping this year, with e-commerce, curbside pick-up and delivery being top-of-mind for the festive season. Online retail sales grew 6.7% year-over-year, whereas in-store sales increased 2.9%. Notably, the Apparel sector showed a strong lead in e-commerce sales, with 6.7% growth for online purchases compared to last year.

• Digital-savvy shopping cities – While many Americans shop online for the holidays, there are some cities in particular that have embraced e-commerce. Cities like Tampa (10.6%) and Phoenix (10.0%) lead with double digital growth followed by Minneapolis (8.9%), Dallas (8.4%), Charlotte (7.9%), Orlando (7.8%), and Houston (7.6%) coming in well above the national total for e-commerce sales compared to 2023.

“This holiday season, we saw consumers motivated by deals and retailers respond with promotions to meet the demand,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated. “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.”

*Excluding automotive

About Mastercard SpendingPulse

Mastercard SpendingPulse measures national retail sales based on aggregated and anonymized Mastercard insights, representing all payment types in select markets around the world.

Mastercard SpendingPulse defines “U.S. retail sales” as sales at retailers and food services merchants of all sizes. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included in the total retail sales figure. SpendingPulse insights are not indicative of Mastercard company performance; insights and forecast are subject to change.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241225785240/en/

Raul Lopez | raul.lopez@mastercard.com | 914-841-7049

Alyssa O’Brien | alyssa.o'brien@mastercard.com | 914-336-1981

Source: Mastercard Investor Relations

FAQ

What was Mastercard's (MA) reported retail sales growth for the 2023 holiday season?

According to Mastercard SpendingPulse, U.S. retail sales excluding automotive grew 3.8% year-over-year from November 1 through December 24, 2023.

How much did online sales grow during the 2023 holiday season according to Mastercard (MA)?

Online retail sales grew 6.7% year-over-year during the 2023 holiday season, outpacing in-store sales growth of 2.9%.

Which cities showed the strongest e-commerce growth in Mastercard's (MA) holiday report?

Tampa (10.6%) and Phoenix (10.0%) led e-commerce growth, followed by Minneapolis (8.9%), Dallas (8.4%), Charlotte (7.9%), Orlando (7.8%), and Houston (7.6%).

What were the top-performing retail sectors in Mastercard's (MA) 2023 holiday spending report?

Top-performing sectors included Restaurants (6.3% growth), Jewelry (4.0%), Electronics (3.7%), and Apparel (3.6%).

What percentage of holiday spending occurred in the last five days according to Mastercard (MA)?

The last five days of the holiday season accounted for 10% of all holiday spending.