Mastercard finds 8.5 percent bump in holiday spend

2021 retail holiday sales exceeded analyst expectations by a margin of 8.5 percent, according to Mastercard SpendingPulse, a monthly report featuring visually enhanced metrics highlighting emerging trends. Designed to help business owners identify emerging trends, the reports cover numerous sectors, including restaurants, lodging and total retail, Mastercard stated.

Steve Sadove, senior advisor for Mastercard and former CEO and chairman at Saks Inc., observed that holiday shopping began early and sustained momentum throughout the season. "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," he said. "Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward."

Commending retailers for offering deep discounts on a broad range of gifts and gadgets early in the season and days before Christmas with guaranteed delivery, Mastercard researchers found holiday spend increased by 8.6 percent in the expanded season from Oct. 11 to Dec. 24, 2021.

In store, online increases

Additional findings from Mastercard SpendingPulse, which measures in-store and online retail sales across all payment types, show consumers returned to stores in record numbers, resulting in an 8.1 percent increase in on-premise shopping. Following are additional key findings:

• Black Friday: Despite dire warnings of low stock and soaring COVID cases, shoppers showed up in droves online and in stores, making Black Friday a top spending day of the holiday season, and momentum continued throughout the Thanksgiving weekend, driving up U.S. sales by 14.1 percent over the previous year's same period.

• In-store sales: Shoppers returned to retail stores in record numbers, increasing sales by 16.5 percent over 2020.

• Ecommerce: Customers continued to shop online, driving up ecommerce sales by 4.9 percent and accounting for 20.9 percent of total retail sales, up from 20.6 percent in 2020 and 14.6 percent in 2019. Retailers noted the channel continues to grow as consumers enjoy the ease of holiday browsing and buying from the comfort of their homes.

• Jewelry sector: The Jewelry sector experienced some of the strongest year-over-year growth it has seen during the two-year pandemic-infused period, as consumers chose smaller boxes for themselves and their loved ones.

Disproving doubters

A Dec. 17, 2021, blog post by Melissa Repko, "Mixed Signals as Target, Walmart and other retailers brace for last minute holiday rush," warned of multiple barriers to success in the final days of retail's peak season.

Noting that stores and ecommerce sites were expecting a final surge of more than 148 million shoppers on the last Saturday before Christmas, in step with the National Retail Federation's predictions, Repko pointed out that number was slightly down from Super Saturday in 2021, which drew 150 million consumers. "This year, however, that final sprint will be shaped by new and conflicting factors," Repko wrote, citing lack of inventory and a surge in COVID-19 cases in the Northeast and Midwest as likely barriers for people to visit physical stores, booking trips and buying concert tickets.

However, as Mastercard and the NRF noted, the retail industry's impressive holiday shopping metrics were a welcome relief to a recovering industry, despite warnings and exceedingly conservative predictions by industry experts and retail analysts.

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