Holiday retail sales in the United States hit their biggest annual increase in 17 years – despite the recent disruption due to the Omicron outbreak and the lingering supply chain problems that have haunted retailers.
Buyers have scooped up clothing, jewelry and electronics despite soaring prices in all three categories, increasing sales between November 1 and December 24 by 8.5% from 2020, according to MasterCard survey SpendingPulse. They have increased by 10.7% compared to the pre-pandemic 2019 holiday season.
While a strong labor market and rising wages fueled the jump, some experts said soaring inflation – which pushed up the prices of jewelry, clothing and electronics in addition to l ‘gasoline and groceries – also helped push the numbers up. The MasterCard survey includes online spending and restaurant purchases, but excludes automobiles and gasoline.
Online sales are up 11% from a year ago and 61% from 2019, before the pandemic sent shoppers en masse into hiding in their homes, according to the survey. This holiday season, e-commerce accounted for 20.9% of total retail sales, up from 20.6% in 2020 and 14.6% in 2019.
Nonetheless, consumers have also returned to stores this holiday season, fueling an 8.1% increase in physical stores from a year ago. Store sales increased 2.4% compared to 2019.
By category, clothing sales were the big winners, up 47% from a year ago, while jewelry sales climbed 32%. Electronics sales increased 16%.
This year’s overall 8.5% increase, which includes spending on cash, check, credit and debit cards, exceeded MasterCard’s previous estimate of a 7.4% increase. The National Retail Federation forecast an increase of 8.5% to 10.5% from a year ago – a figure that excludes auto sales, gasoline and restaurants.
But buyers were also plentiful in stores and malls this year.
In-store sales increased 8.1% from last year and 2.4% from 2019.
Part of the increase in sales is due to inflation, according to Craig Johnson, retail analyst at Customer Growth Partners. He says he raised his own holiday sales forecast from 6.7% to 10.2% “mainly due to higher and broader inflation than we saw in early October when we worked out the forecasts”.
Nearly half of Americans say inflation is causing them difficulty, according to a Gallup poll. Many consumers were able to absorb the price increases, in part because disposable income over the past year increased 4.1% and spending increased 12%, according to a report by the National Retail Federation from the 2 December.
Consumers have indicated they plan to spend a little less on the holidays – or $ 997.73 – compared to the $ 1,047.83 they said they would spend in 2019, according to the trade group.
Retail sales continued to increase in an economic environment that crippled some retailers. Many have had to dramatically increase wages to find and keep workers, increasing the cost of their operations. They also rushed to fill the shelves of major still-safeguarded US ports.
At the same time, Americans have proven their resilience in different ways. They have paid more for basic necessities like food and gasoline, putting pressure on vacation buyers’ budgets. In fact, consumer prices have risen 5.7% in the past year, the fastest pace in 39 years, as spike in inflation confronts Americans with holiday shopping season .
The November increase, announced by the Commerce Department on Thursday, follows a 5.1% increase for the 12 months ending in October, continuing a series of annual price increases that have been above target inflation rate of 2% set by the Federal Reserve.
Americans have also learned to adapt to product shortages, turning to alternatives if their best choices weren’t available, or looking to other sites like eBay to find their best brands.
Although big box retailers like Target and Walmart have promised well-stocked shelves for the holidays, supply constraints appear to be stubborn elsewhere. Target CEO Brian Cornell recently told The Associated Press he believes it will take several years to remove blockages in the supply chain.
With post wires