2024 retail sales rose 3.8 percent compared with the same period last year.
The holiday shopping season exceeded expectations, with consumers eager to find discounts and deals, fueling stronger-than-anticipated sales for retailers. According to Mastercard SpendingPulse, U.S. retail sales rose 3.8 percent from November 1 to December 24 compared to the previous year, surpassing predictions from both Mastercard and the National Retail Federation. A recent Washington Post article by Hannah Ziegler and Jaclyn Peiser discusses the willingness and ability of consumers to spend, although customers’ focus remained on finding value. Healthy labor market conditions and rising household wealth were key factors in driving this solid spending.
According to the article, online shopping played a significant role in this growth, with sales rising 6.7 percent, compared to a 2.9 percent increase in in-person shopping. Apparel sales rose by 3.6 percent, while electronics saw a 3.7 percent increase. Restaurants also experienced a 6.3 percent increase in spending, driven by strong demand for dining out. Mastercard’s report excludes car sales and is not adjusted for inflation, but it underscores a robust holiday period fueled by online shopping and consumer appetite for bargains.
Leading up to the holiday season, retailers had anticipated that shoppers would prioritize value, and they were right. Many key holiday gift categories, including electronics, apparel, personal-care products, and jewelry, saw modest price increases or even price drops compared to the previous year. Steve Sadove, a senior adviser for Mastercard, noted that retailers responded with promotions to meet this demand, further supporting consumer spending. This trend aligned with findings from Visa, which also reported a better-than-expected 4.8 percent year-over-year increase in U.S. retail sales during the seven weeks following November 1.
Wealthier consumers were particularly focused on durable goods, including home appliances, furniture, and electronics like smartphones and computers. Their increased spending came amid concerns about potential tariffs being imposed starting in 2025. This segment helped fuel a nearly 4 percent rise in electronics sales, rebounding from a slight dip in 2023. Black Friday through Cyber Monday saw a record $41.1 billion in online spending, with high-ticket items like Apple Watches, PlayStation 5s, and digital cameras driving a significant portion of the growth.
Despite concerns that consumers would cut back on spending, the data revealed that shoppers were still willing to spend – just more selectively. According to Michael Gunther, head of insights at Consumer Edge, consumers were not eliminating discretionary spending but were instead being more deliberate with their purchases. Consumers focused on finding deals, especially on big-ticket items during key shopping events like Black Friday and Cyber Monday. Meanwhile, those from households earning less than $100,000 showed more caution in their spending decisions.
Jewelry emerged as another strong performer this holiday season, with sales increasing by 4 percent. This was a rebound from a slight decline the previous year, with younger shoppers, particularly those under 45, driving sales. Luxury jewelry brands like Cartier and Tiffany saw increased demand, while brands popular with Millennial and Gen Z consumers also reported strong sales growth. These younger shoppers made up 44 percent of jewelry transactions, an increase from 38 percent in 2022, indicating the growing importance of these generations in the luxury market. However, discount retailers also saw a boost, with dollar stores and Walmart benefiting from increased traffic, especially among higher-income shoppers.
