US holiday sales pick up as shoppers invest in their homes

Retail sales in the United States increased a modest three per cent during the holiday season as homebound shoppers spent more on furnishing and food, but less on clothing and jewellery, according to figures released Saturday by a United States 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 fuelled much of the 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 gasolene 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.

Steve Sadove, senior adviser for Mastercard and former CEO and Chairman of Saks Incorporated, 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 US retailers have filed for 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.

Clothing stores and specialty retailers offered big discounts and promoted kerbside pickup in the hopes of rescuing the holiday season and surviving a difficult year. There was some pay-off, as online clothing sales rose 15.7 per cent, according to Mastercard. E-commerce sales at department stores also ticked up 3.3 per cent.

AP