US retail sales up 3.8% this holiday season according to Mastercard SpendingPulse

This Christmas season proved to be a merry one for US retailers, with retail sales increasing 3.8 percent year on year from November 1 to December 24, according to insights from Mastercard SpendingPulse.

"The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods," said Michelle Meyer, chief economist at Mastercard Economics Institute, in a statement. "Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains."

Seen as the most ‘valuable’ time of the year, savvy shoppers this year prioritized getting the most value for their money, taking advantage of November and Black Friday deals and stocking up as December 24 approached. Retail sales grew by 3.8 percent compared to 2023, with the final five days of the holiday season contributing 10 percent of total holiday spending.

A well-rounded holiday spending trend was also noticed this season, with increased consumer interest in experiences such as dining out, leading to a 6.3 percent rise in restaurant spending compared to last year. Spending on consumer goods also grew, with key gift-giving categories like apparel (3.6 percent), jewelry (4.0 percent), and electronics (3.7 percent) showing notable year-over-year growth.

Unsurprisingly, consumers also leaned heavily toward digital-first shopping this holiday season, favoring e-commerce, curbside pick-up, and delivery options. Online retail sales saw a 6.7 percent year-over-year increase, outpacing the 2.9 percent growth in in-store sales. The apparel sector stood out, leading the way in e-commerce with a 6.7 percent rise in online purchases compared to last year, underscoring an appetite for newness in fashion. Although online shopping was popular nationwide during the holidays, selected cities fully embraced e-commerce. Tampa (10.6 percent) and Phoenix (10.0 percent) saw impressive double-digit growth, with Minneapolis (8.9 percent), Dallas (8.4 percent), Charlotte (7.9 percent), Orlando (7.8 percent), and Houston (7.6 percent) also exceeding the national e-commerce sales growth compared to 2023. 

"This holiday season, we saw consumers motivated by deals and retailers respond with promotions to meet the demand," said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated, in a statement. "The value-minded consumer showed up to shop at brick-and-mortar stores and e-commerce platforms, with retailers managing across both to capture attention throughout the season."