In the first major post-holiday report, Mastercard projected U.S. retail sales grew 3.0 percent in the expanded selling season from Oct. 11 through Dec. 24, short of 2019’s four percent gain, but ahead of a forecast for 2.4 percent growth.
Mastercard SpendingPulse tracks online and in-store spending with all forms of payment.
The Wall Street Journal noted that Mastercard’s data showed U.S. retail sales rose only 2.4 percent for the two-month period — Nov. 1 to Christmas Eve — below the 3.6-to-5.2 percent growth predicted by NRF. The publication indicated a “more complete picture” of holiday spending won’t arrive until the government’s December figures and retail’s quarterly results arrive.
Some questions still unanswered:
Who were retail’s winners? Amazon, Walmart and other big boxes are expected to have gained share due to the ongoing appeal of one-stop shopping, online order pickup and expansive e-commerce capabilities during the pandemic. Aligned with stay-at-home needs, Mastercard’s report found strong double-digit gains in Furniture & Furnishings and Home Improvement categories, along with a nearly 20 percent decline in apparel.
Discussion Questions: How would you rate how the holiday selling season likely performed for most retailers versus plans? Which changes in holiday shopping behavior will clearly be considered to be pandemic-related when looking back in the years ahead?
Comments from the RetailWire BrainTrust:
I believe we didn’t know what we didn’t know going into an unknown event this season. A lot of retailers did start early. Many retailers adapted quickly, adding BOPIS, curbside pickup and home delivery to their purchase options. Local seemed to receive extra emphasis this year (which was a great thing). Some of what we saw will become the norm again next holiday season – I believe the contactless transaction will become more refined and more seamless.
Richard Hernandez, Director, Affiliated Foods, Inc.
Early results suggest that we’re likely going to see the continued pattern of “winners” and “others” through the holidays. The stores that were doing well before the holidays extended their gains, the stores and categories that were struggling had a tough time. I will be interested to see the impact of deep discounts in apparel and home and how consumers responded. And to see if it was enough to move through the glut of inventory they’ve been dealing with.
Gary Sankary, Retail Industry Strategy, Esri
This holiday shopping season was surely an anomaly for retail sales. In the end, online should be outpacing in-store sales just because of the logistical issues brought about by the pandemic. As the next COVID-19 surge hits following the post Christmas period, we will see even more changes in shopping as more of the nation undergoes stricter lockdowns.
Kai Clarke, CEO, President- American Retail Consultants
This may end up being a holiday sales season of extremes. There will be strong winners, and some losers, largely category dependent. It appears retailers were successful in getting consumers to shop early and spread out those sales. E-commerce took a front seat but it’s not clear from the data yet how successful retailers were at replacing in-store sales with online sales.
I find MasterCard data tends to reflect a slightly inflated view of the season, though not as overly optimistic as NRF. I suspect we’ll see large mass merchandisers tell a story of big sales gains, mostly from e-commerce and curbside pickup, with categories like apparel in the specialty segment not performing as well as they had hoped. Home goods and electronics likely did well. We’ll also need to see what happens with returns and gift card purchases to get the complete picture.
What is clear is that in certain regions, in-store traffic was way down and we’ll have to see final data to know if digital sales compensated for that (they didn’t for Black Friday to Cyber Monday).
Ricardo Belmar, Retail Transformation Thought Leader
Read the full weekly consensus