Source: Getty Images
Did holiday selling beat plan?
In the first major post-holiday report, Mastercard has projected that U.S. retail sales from Nov. 1 through Dec. 24. grew 8.5 percent year-over-year and 10.7 percent against the pre-pandemic 2019 period. The gains were attributed in part to early holiday purchases incentivized by out-of-stock concerns.
The gains also reflected early promotions, the mountain of pandemic savings consumers have built up in the last two years, and comparisons against pandemic-driven restrictions for in-store shopping in the 2020 holiday season.
Some holiday themes surfacing include:Â
- Online gains more share: E-commerce sales in the traditional holiday period grew 11.0 percent year-over-year and 61.4 percent against 2019. E-commerce made up 20.9 percent of total retail sales, up from 20.6 percent in 2020 and 14.6 percent in 2019.
- In-store selling bounces back: With pandemic-related restrictions and concerns reduced, sales at physical stores rose 8.1 percent compared with 2020 and 2.4 percent compared with 2019. The gains came despite a slowdown in-store traffic in recent weeks due to a near absence of foreign tourists and the return of infection fears due to the omicron variant. Visits to retail stores dropped 26.3 percent on Super Saturday (December 18) compared to 2019, but were still up 19.4 percent year over year.
- Traditional categories bounce back: With traveling and socializing resuming, apparel sales bounced back, climbing 47 percent compared with 2020 and 29 percent over 2019. Jewelry sales jumped 32 percent and 26 percent from 2020 and 2019 levels. Electronics were up 16 percent and 20 percent respectively.
- Inflation boost: Higher prices bolstered the gains as inflation hit a nearly four-decade high in November.
- Packages arrive: ShipMatrix estimated that nearly all deliveries from FedEx, UPS and the U.S. Postal Service would have arrived by Christmas Eve. Investments in carrier capacity including adding more sorting machines, new facilities or more weekend deliveries helped offset broader supply challenges such as truck driver shortages. Early buying was credited with easing network strains.
- Mastercard SpendingPulse: U.S. retail sales grew 8.5 percent* this holiday season – Mastercard SpendingPulse
- Good tidings for retailers: Mastercard SpendingPulse anticipates U.S. holiday retail sales to grow 7.4 percent* in 2021 – Mastercard SpendingPulse
- Sensormatic Solutions by Johnson Controls releases Super Saturday shopper traffic insights – Sensormatic Solutions
- Why Christmas Gifts Are Arriving on Time This Year – Shipmatrix
- Early Holiday Shopping Helps Offset Omicron Damper – Wall Street Journal
- Holiday sales soared, with e-commerce notching huge gains, a report says. – New York Times
- U.S. holiday retail sales rise 8.5% as online shopping booms – Mastercard
- Despite supply issues and omicron, holiday sales rise 8.5% – Associated Press
Discussion Questions
DISCUSSION QUESTIONS: How would you sum up the 2021 holiday season? What questions about the holiday performance are still unknown? Are any lessons already apparent?
Poll
Loading …BrainTrust
"The most encouraging number is the robust comparison to pre-pandemic levels."
Dick Seesel
Principal, Retailing In Focus LLC
"The stats show that holidays sales were up but retailers may have over-projected plans due to higher levels of inventory."
Liza Amlani
Principal and Founder, Retail Strategy Group
"It feels like we’ve only seen about three-fourths of this movie, and that there is a plot twist coming any day now."
Overall, this is solid improvement over 2020. We are learning to live with COVID-19 and, while it’s still having a great impact on how we conduct ourselves, it’s good to see shoppers coming back out. One big lesson the pandemic has taught us is just how resilient shoppers are and how precious store traffic is.
The stats show that holidays sales were up but retailers may have over-projected plans due to higher levels of inventory. With looming supply chain disruptions, many retailers pushed forward orders. We could have an excess inventory issue on our hands. Until retailers release their numbers, and until we see the impact of overbuying and the impact of returns vs. previous years, it’s hard to tell if plans were reached.
It was a robust improvement from 2020. I saw a lot more people in the brick-and-mortar establishments, and the sales started much earlier than normal.
The most encouraging number is the robust comparison to pre-pandemic levels. There is still plenty of business to be done post-Christmas (clearance sales, gift card redemptions) although Omicron may drive more consumers to shop online.
But the bottom line is the underlying strength of the consumer, despite everything standing in the way — from COVID-19 to inflation and supply chain issues. As a retail veteran going back to the inflationary days of the late 1970s, I commented not long ago that inflation can actually spike comparable sales even if stores are selling the same number of units.
It feels like we’ve only seen about three-fourths of this movie, and that there is a plot twist coming any day now. As in, where is all the “late” inventory? I’ve read several good news stories about margins, but what is January about to reveal? And February? Hopefully there are some powerful lessons available from resilient consumers shopping “lean” inventories, but much is yet to be revealed.