US holiday sales recorded their fastest increase in 17 years. Despite a gloomy scenario involving high prices, supply issues, and the omicron strain, Americans remained in a festive holiday mood this year.
US Holiday Sales Up by 8.5% Compared to Last Year
Mastercard’s SpendingPulse tracks all kinds of payments including cash and debit cards. This year, the tracking report expected 2021 to report a 7.4% gain.
Instead, Americans went all out and registered an 8.5% increase. This also meant holiday sales went up 10.7% compared to the pre-pandemic holiday season.
The holiday sales results covered the period between November 1 to December 24. Mastercard noted that purchases of clothing and jewelry fueled the surge, which rose 47% and 32% respectively.
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Meanwhile, online sales went up 11% from 2020. It also meant a 61% jump from 2019 numbers. At the same time, department stores registered a 21% increase over 2020.
Strong Holiday Season Led To Strong Holiday Sales
Even more detailed numbers will come out when the National Retail Federation will issue its reports by January. The NRF is the country’s largest retail trade group.
The Commerce Department will provide the sales figures for November and December, which the NRF will analyze.
The federation will also break down fourth-quarter financials from various retailers and release the figures by February.
Overall, analysts expected strong holiday sales this year. Many Americans anticipated a product shortage so many started shopping as early as October.
Even under the shadow of a pandemic for over two years now, consumers remained determined to celebrate the holidays.
The Omicron strain also brought additional complications. Many had to cancel gatherings at the last minute to avoid more infections.
Holiday Sales Posting Record Numbers
As a result, Americans turned to shop throughout the last quarter. The NRF said by early December, holiday sales were already on track to beat forecasts.
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Last year already brought record numbers, posting an 8.2% increase despite a global lockdown. Many Americans went online to shop for everything from pajamas to gifts.
The National Retail Federation also expects online and other non-store sales will increase between 11% and 15%.
The total does not include automobile dealer sales, fuel purchases, and restaurant sales. Over the past five years, holiday sales averaged gains of 4.4% over the last five years.
Store Traffic Remains Up Despite Omicron
The NRF update came out before Omicron hogged the headlines. However, even with the rejoinder to avoid crowding, overall store traffic didn’t go down.
Instead, store traffic went up almost 20% for the week ending December 18. However, that number remains 23% down versus 2019 holiday numbers.
Peter McCall, senior manager of retail consulting of Sensormatic Solutions, noted new shopper habits.
Americans still frequent retail stores but now favor open-air shopping centers and outlet malls. At the same time, shoppers tended to avoid enclosed shopping centers.
Retailers Scrambled To Keep Stores Stocked and Staffed
In addition, retail sales had to contend with changes in the economic environment. Store owners had to increase worker pay to retain their services.
This in turn increased their costs of doing business. Retailers also had to contend with higher delivery costs and longer waiting times.
Meanwhile, Americans also proved their mettle. Many households had to deal with paying more for the same amount of food and gas. Inflation went up higher than expected, leading to higher prices for nearly everything.
Consumer prices rose 5.7% versus 2019. The increase is the fastest pace in nearly forty years. Americans also learned to shift stores or brands when their preferred products remain out of stock. They also went to auction or reseller sites to get their wish lists fulfilled.
Watch the Yahoo! FInance news video reporting that US holiday sales grew 8.5% this season:
Did you shop more or less this year compared to other years? What do you think is the reason why holiday sales remained high in 2021?
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