The 2023 holiday season witnessed a surge in retail sales despite the current economic climate, according to data from Mastercard. Between November 1 and December 24, retail sales grew by 3.1% year-over-year.
According to its SpendingPulse research, Mastercard revealed that consumers relied on both online and in-store for all of their holiday shopping needs. Online retail sales rose by 6.3% year-over-year while in-store sales also increased, though more modestly, at a 2.2% year-over-year growth. Although online spending is growing rapidly, in-store sales continue to dominate a significant portion of total retail spending.
Steve Sadove, Senior Advisor at Mastercard, noted that the strategic moves by retailers to kickstart promotions early in the season help drive up sales. This proactive approach allowed consumers ample time to hunt for the best deals and promotions. Ultimately, the focus was on maximizing value for every dollar spent, reflecting a resurgence in spending patterns reminiscent of pre-pandemic trends.
Additional Key Findings
While shopping dominated across multiple categories, apparel emerged as one of the top categories, increase by 2.4% year-over-year.
The restaurant sector also experienced a substantial increase of 7.8% year-over-year as many consumers gathered in restaurants with their families and friends to ring in the holidays. Grocery sales, meanwhile, also saw a positive uptick, rising by 2.1%.
Holiday Trends
Previous reports also highlighted that retail holiday sales would increase this year despite inflation and a potential recession looming on the horizon. That’s not to say that consumers weren’t watching their budgets—they were. Rather, they were relying on their credit cards, as well as buy now, pay later services for their holiday purchases.
Many consumers tapped credit and BNPL during the big Thanksgiving and Black Friday days, leading to $5.6 billion in sales, per Adobe data. And the reliance on these particular payment methods has contributed to strong Christmas performance.
