Holiday retail sales across the US surged to their biggest yearly increase in 17 years — despite recent disruptions from the Omicron outbreak and persistent supply-chain snags that have dogged retailers.
Shoppers scooped up clothing, jewelry and electronics despite surging prices in all three categories, driving up sales between Nov. 1 and Dec. 24 by 8.5% compared with 2020, according to the MasterCard SpendingPulse survey. They were up 10.7% versus the pre-pandemic 2019 holiday season.
While a strong job market and rising wages fueled the jump, some experts said surging inflation — which has jacked up prices on jewelry, apparel and electronics in addition to gas and groceries — also helped goose the figures. The MasterCard survey includes online spending and restaurant purchases, but excludes autos and gasoline.
Online sales were up 11% from a year ago and 61% from 2019, before the pandemic sent shoppers hunkering down at home en masse, according to the survey. This holiday season, e-commerce made up 20.9% of total retail sales, up from 20.6% in 2020 and 14.6 % in 2019.
Nevertheless, consumers also returned to stores this holiday season, fueling an 8.1% increase at brick-and-mortar outlets versus last year. Store sales rose 2.4% versus 2019.
By category, apparel sales were the big winner, soaring 47% versus last year while jewelry sales spiked by 32%. Electronics sales rose 16%.
This year’s 8.5% surge overall, which includes spending by cash, check credit and debit cards, exceeded MasterCard’s previous estimate of a 7.4% increase. The National Retail Federation has forecasted an 8.5% to 10.5% increase over last year — a number that excludes auto sales, gasoline and restaurants.
But shoppers were out in force in stores and malls this year as well.
In-store sales rose by 8.1% over last year and by 2.4% over 2019.
Part of the sales increase is because of inflation, according to Craig Johnson, a retail analyst at Customer Growth Partners. He says he raised his own forecast for holiday sales from 6.7% to 10.2% “primarily due to higher and broader inflation than we had seen in early October when we developed the forecast.”
Nearly half of Americans say that inflation is causing them hardship, according to a Gallup poll. Many consumers have been able to absorb the price increases, in part because disposable income over the past year has been up 4.1% and spending has increased 12%, according to a Dec. 2 National Retail Federation report.
Consumers have indicated that they plan to spend slightly less on the holidays – or $997.73 – compared with the $1,047.83 they said they would spend in 2019, according to the trade group.
Retail sales have continued to rise in an economic environment that has hamstrung some retailers. Many have had to sharply increase pay to find and keep workers, increasing their cost of doing business. They also scrambled to fill shelves with major US ports still backed up.
At the same time, Americans proved their resilience in different ways. They paid more across the board for necessities like food and gas, putting pressure on holiday shoppers’ budgets. In fact, consumer prices rose 5.7% over the past year, the fastest pace in 39 years, as a surge in inflation confronts Americans with the holiday shopping season under way.
The November increase, announced Thursday by the Commerce Department, followed a 5.1% rise for the 12 months ending in October, continuing a string of annual price increases that have been above the 2% inflation target set by the Federal Reserve.
Americans also learned to adjust to product shortages, turning to alternatives if their top choices were not available, or looking at other venues like eBay to find their top brands.
Though big-box retailers like Target and Walmart promised stocked shelves for the holiday, supply constraints appear to be stubborn elsewhere. Target CEO Brian Cornell recently told The Associated Press he believes that it will take several years for supply chain clogs to be cleared.
With Post wires