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Despite fears around the COVID-19 Omicron varient, inflation and supply chain disruptions, shoppers were undeterred this holiday season, as sales increased 8.5% this season. The key drivers were online shopping and the jewelry sector, which saw its biggest year-over-year increase, according to Mastercard Spending Pulse, which measures in-store and online retail sales.
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The retail sales also increased 10.7% compared to 2019. Online sales grew 11% compared to the same period last year, while in-store sales grew 8.1%, compared to 2020, and 2.4% compared to 2019, the preliminary insights show, according to Mastercard.
The gain was a bit lower than the 8.8% increase that Mastercard had predicted, but it was the biggest annual increase in 17 years, CNBC reported.
“Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, said in a statement. “Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward.”
With supply chain shortages on their minds, one of the key trends of this holiday season is that consumers shopped early.
“My biggest concern going into the holiday shopping season was supply chain issues,” Dustin Thackeray, chief investment officer at Crewe Advisors, told Bloomberg. “I was worried that there wouldn’t be enough goods on shelves to help with spending, but that seems largely overstated and the U.S. consumer is still strong despite Omicron.”
In addition, retailers offered special promotions early and then again later in the season as shoppers raced to secure “guaranteed by Christmas” shipping offers, according to Mastercard.
One of the sectors which saw the biggest sales increase is the jewelry sector, experiencing the strongest year-over-year growth, with sales increasing 32% compared to 2020 and 26.2%, compared to 2019.
In terms of online shopping, the sector continues to be on the upward trend it has been since the beginning of the pandemic, making up 20.9% of total retail sales, up from 20.6% in 2020 and 14.6% in 2019.
Another key finding is that Thanksgiving weekend remained key, with Black Friday marking the top spending day of the 2021 holiday season yet again.
For the Thanksgiving weekend, shoppers drove U.S. retail sales up 14.1% year-over-year. In-store sales also grew, increasing 16.5% year-over-year, while e-commerce sales experienced sustained growth, up 4.9% year-over-year. Key drivers for the weekend’s growth were apparel sales, with 51.2%, department stores sales, with 19.0%, and jewelry sales, with 78.4%.
The National Retail Federation (NRF) expects that 2021 holiday sales could grow as much as 11.5% over 2020, exceeding NRF’s earlier forecast of between 8.5% and 10.% growth. Even at the low end of the range, both the amount spent and the growth rate would set new records, the NRF said in a statement.
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“We expect demand will remain strong through December, even though consumers started holiday shopping earlier than ever this year,” NRF President and CEO Matthew Shay said in the statement. “Despite the rise of the omicron variant, increased vaccination rates combined with retailers’ ongoing safety protocols and procedures have resulted in consumers who feel they can continue to shop safely and conveniently. We believe that holiday sales this year could grow as much as 11.5 percent over 2020.”
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