Holiday sales tick up as shoppers invest in their homes

NEW YORK (AP) – Retail sales increased a modest three-per-cent during a longer holiday season this year, as homebound shoppers spent more on furnishing and food but less on clothing and jewellery, according to figures released on Saturday by a firm that tracks all forms of payments.

The increase fell short of predictions from the National Retail Federation, the nation’s largest retail trade group, which had expected sales to rise between 3.6 per cent and 5.2 per cent this year compared to 2019.

As expected, a surge in online shopping fueled much of spending. Online sales rose a record 49-per-cent year-over-year between October 11 and December 24, according to the Mastercard SpendingPulse figures, which exclude services, automotive and gasoline sales.

The holiday shopping season was considered longer this year as retailers offered promotions sooner and encouraged customers to get a jump-start to avoid delivery delays. During the traditional holiday period, between November 1 and December 24, retail sales rose 2.4 per cent year-over-year, according to Mastercard’s data.

Senior Advisor for Mastercard and former CEO and Chairman of Saks Incorporated Steve Sadove said the surge in online spending and the early shopping was “a testament to the holiday season and strength of retailers and consumers alike”.

Buying trends benefited e-commerce giant Amazon and big-box stores like Target and Walmart, which already had robust e-commerce operations and were allowed to stay open during the pandemic, attracting shoppers who wanted to avoid visiting multiple stores.

But the pandemic has been detrimental for smaller shops, clothing brands and department stores, which had already been struggling to adapt to the rise of online shopping. Already, more than 40 American retailers have filed for Chapter 11 bankruptcy protection since the pandemic started forcing shutdowns in March.

Holiday department store sales fell 10.2 per cent year-over-year, according to Mastercard.

Spending on apparel plunged 19.1 per cent, and jewellery sales fell 2.3 per cent.

Shoppers instead invested in their homes. Furniture and furnishing sales increased 16.2 per cent, while spending on home improvement rose 14.1 per cent. Consumers also favoured electronics and appliances, a category where sales rose six per cent.