Table of Contents
NEW YORK — Robust sales from before Thanksgiving through Christmas gave retailers much to cheer about at the end of last year. Holiday sales increased 5.1% to more than $850 billion — the strongest growth in the past six years, according to Mastercard SpendingPulse. Online shopping saw a 19.1% advance over 2017, with Amazon reporting record-breaking results.
“From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” said Steve Sadove, senior advisor for Mastercard and former chairman and chief executive officer of Saks Inc. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
The growth was in line with the National Retail Federation’s finding that November retail sales advanced 5% unadjusted year over year. Health and personal care stores saw November sales climb 3.6% year over year, according to the NRF. General merchandise stores had a 4.2% gain, and grocery and beverage stores posted a 3.3% advance.
For the entire holiday season, chain drug stores saw dollar volume rise 5.2%, with same-store sales advancing 2.5%.
Consumers had “the capacity and confidence to spend this holiday season,” NRF chief economist Jack Kleinhenz said, citing the influence of stronger employment, improved wages, tax cuts and increased net worth. “Consumer spending remains solid and clearly provides evidence that the economy is healthy as we head into 2019.”
Matthew Shay, NRF’s president and CEO, said, “Looking to next year, while we recognize the growing anxiety among investors, we believe retail’s strong fundamentals will carry into 2019 and beyond.” Despite headwinds, “particularly the threat of an escalating trade war with China, which economists rate as the top economic risk,” he said “there are also reasons for optimism”
Mastercard SpendingPulse detailed holiday shopping from November 1 through December 24. Key findings indicate that despite weather challenges, this was a winning holiday season for retail overall; however, the story was different category by category:
Total apparel had a strong season with a growth rate of 7.9% compared to 2017, recording the best growth rate since 2010. The category followed through on strong momentum that started during the back-to-school season and accelerated through fall right up to Christmas.
Home improvement spending continued to surge across the U.S., with spending during the holiday season up 9%. This trend started before the holiday season and helped the sector power through to a strong finish.
Department stores finished the season with a 1.3% decline from 2017. This follows two years that showed growth below 2%, some of which can be attributed to store closings. However, the online sales for department stores indicated a more positive story, with growth of 10.2%.
Electronics and appliances were down 0.7%. The home furniture and furnishings category grew 2.3%.
Poor weather did pose an issue during some prime time shopping periods. This included cold weather on Black Friday morning on the East Coast and wet weather conditions the weekend of December 15 – December 16, on both the East and West coasts. Conditions were also less than ideal on Friday, December 21, in the East, with storms that impacted the final run of the season.
Amazon reported it had more items ordered worldwide than ever. Customers shopped at record levels from a wide selection of products across every department. Best-selling products included the Echo Dot; L.O.L. Surprise! Glam Glitter Series Doll; fashion items from Carhartt; and Bose QuietComfort wireless headphones.
“This season was our best yet,” said Jeff Wilke, Amazon’s Worldwide Consumer CEO. “We are thrilled that in the U.S. alone, more than 1 billion items shipped for free this holiday with Prime.”
