“This holiday retail season looked different than years past,” Steve Sadove, senior adviser for Mastercard and former CEO and chairman of Saks Incorporated, said Monday (Dec. 26). “Retailers discounted heavily but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic,” he added.
According to the report, the 7.6% year-over-year increase — which is not adjusted for inflation — was recorded between Nov. 1 and Dec. 24, and measured in-store and online retail sales across all forms of payment.
While restaurant sales were up 15% from last year when many were closed or being shunned by omicron-weary customers, that rebound was offset by outsized weakness in key holiday season stalwarts like jewelry and electronics which both fell more than 5% the new findings showed.
The report also found that online sales increased 10.6% versus last year, with eCommerce making up 21.6% of total sales this year, up from 20.9% in 2021 and 20.6% in 2020 as consumers put greater stock in convenience and discounts and turned to online shopping to get it.
“Inflation altered the way U.S. consumers approached their holiday shopping — from hunting for the best deals to making trade-offs that stretched gift-giving budgets,” said Michelle Meyer, North America chief economist, Mastercard Economics Institute. “Consumers and retailers navigated the season well, displaying resilience amid increasing economic pressures.”
As PYMNTS noted last week, that pressure was too much for some holiday shoppers, with half of the consumers we surveyed saying they were cutting back on spending this year simply because they don’t have the money. Another 56 million consumers were choosing not to shop at all this year.
But of those consumers who did shop this year, about half of them said they planned to pay for their purchases using credit cards, loans, or buy now, pay later (BNPL) options.
Extrapolate the data somewhat, and that means about 98 million U.S. consumers planned to pay for at least one holiday purchase using one of those options. As many as 23% of holiday shoppers — or 48 million consumers — intend to use these methods to finance more than half of their holiday gift-giving.
And when it comes to factors that determine consumers’ choice of retailers, PYMNTS research found that 60.4% of shoppers sought out discounts or sales, 48.3% wanted free shipping, and 11.4% looked for BNPL options.