(Reuters) – U.S. retail sales rose from Nov. 1 to Dec. 24 as strong promotions prompted consumers to make last-minute purchases to boost sales during a highly competitive holiday season for retailers. It has increased by 3.8% over the period.
The sales growth was well above last year's 3.1% increase, with the final five days of the season accounting for 10% of all holiday spending, and easily beating Mastercard's September forecast for a 3.2% increase.
Major retailers including Walmart, Target and Amazon.com have stepped up promotions and value messages to attract customers during the shorter-than-usual holiday season, with just 23 days until Christmas.
“While consumers have the appetite and ability to spend, as evidenced by the concentration of spending on e-commerce during the holiday shopping season, the biggest promotional period,'' said Michelle Meyer, chief economist at Mastercard Economic Research, “It became clear that they were driven by the pursuit of value.”
Online sales grew at a faster pace, increasing 6.7% compared to 6.3% a year ago, due to strong demand in the apparel sector. Low-cost e-commerce rivals Shein and PDD Holding Ltd.'s Temu, as well as short video app TikTok, have soared in popularity ahead of the Black Friday and Cyber Monday shopping events.
Retailers have been using generative AI customer service and search capabilities to help shoppers find great deals on websites and mobile apps. We've also improved our curbside pickup and delivery services to ensure a smoother shopping experience.
Walmart and Amazon.com posted record sales on Black Friday and Cyber Monday, according to spending data from earlier this month. By contrast, Target and Best Buy struggled to grow sales.
Consumers strongly prefer experiences like eating out, with restaurant spending increasing 6.3% year over year, according to Mastercard data.
Shopping for gift items was also up year over year, with demand for apparel, jewelry and electronics increasing, with each category increasing by 3.6%, 4% and 3.7%, respectively, the report said.
Analysts had expected a mixed holiday season, with in-store spending curtailed on key shopping days such as Black Friday.
Mastercard SpendingPulse measures in-store and online retail sales across all payment formats. This data does not include car sales and is not adjusted for inflation.
(Reporting by Savyata Mishra in Bengaluru; Editing by Anil D'Silva)
