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What happened this holiday selling season?

Written by Tom Ryan

Photo: RetailWire

In the first major post-holiday report, Mastercard has 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.
  • Did online sales just replace in-store sales? Mastercard reported online sales accelerated 49.0 percent from Nov. 1 to Dec. 24 versus an 18.8 percent gain last year. Due to in-store restrictions, store traffic fell 31.3 percent over the seven days leading up to Dec. 24, according to Sensormatic Solutions.
  • Were profit margins depressed? Lean inventories helped reduce the need for markdowns but the online surge likely drove up shipping and logistical costs.
  • What’s the consumer mindset? On Dec. 22, The Conference Board reported consumer confidence registered its second-lowest reading since the pandemic lockdowns earlier this year. The performance was attributed to COVID-19’s resurgence and a deteriorating labor market.
  • Did the early deals help? Retailers began their holiday promotions early in October to reduce overcrowding in stores, ease e-commerce supply chain strains and to match Amazon’s delayed Prime Day.
  • Did the last mile deliver? ShipMatrix data indicates the three shipping carriers delivered high rates of on-time delivery for the week ended Dec. 19 with the aid of early cut-off dates, restrictions placed on large volume shippers and surcharges that incentivized early shipments.

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