U.S. Holiday Sales Rise 3.8% Amid Inflation Fears

Holiday cheer is still in full swing in 2024, with a Mastercard SpendingPulse report showing a 3.8% increase in U.S. retail sales during the 2024 holiday season, excluding automotive, showing the consumer is still spending. 

Online sales naturally led the charge with a 6.7% year-over-year growth, surpassing the 2.9% rise in in-store sales. The final five days of the season alone accounted for 10% of total spending. Apparel, Jewelry, and Electronics emerged as key buyer sectors, posting growth of 3.6%, 4.0%, and 3.7%. Dining out also remained a priority, increasing restaurant spending by 6.3%, proving that despite some volatility in the country, people are still interested in going out, having a bite, and having a few drinks.

Digital-first shoppers dominated the consumer market, leveraging e-commerce, curbside pickup, and delivery options. Jeff Bezos and the like are genuinely enjoying their holidays. Cities like Tampa were on the top of this trend, with online sales surging by 10.6%. These consumer patterns indicate a base truly prioritizing convenience and value, especially during high promotional periods like Black Friday, when the crowds are likely so bad that staying at home or in the car is just better.

Overall, though this holiday season's results highlight the broader economic environment, the report shows a strong, robust labor market and household wealth gains supported by solid spending. In the third quarter of 2024, household net worth experienced significant growth, increasing by 2.9% or $4.8 trillion to reach a record high of $168.8 trillion. For businesses, it also reflects a more profound shift in consumer habits. The growing preference for digital channels is a clear, ongoing signal that a permanent transformation in retail dynamics is here, and fighting it is likely a losing battle.

Retailers, as always, now face the challenge of meeting consumer expectations for seamless digital shopping while capitalizing on high-demand categories. If they can't do it, you can bet retail will find someone who can.