Holiday Season Retail Sales Expected to Rise 3.2% According to Mastercard Forecast
In a recent report by Mastercard, U.S. retail sales are projected to increase by 3.2% during the holiday season. This growth comes as companies aim to attract budget-conscious shoppers with enticing deals, especially in light of a shorter shopping window this year.
Compared to last year's 3.1% rise in retail sales between November 1 and December 24, this year's forecast indicates a slightly higher growth rate. Mastercard SpendingPulse, which tracks both in-store and online retail sales across various payment methods, excludes automotive sales from its measurements.
The importance of this forecast lies in the consumer behavior trends expected this year. With shoppers becoming more selective in their spending, major retailers like Walmart, Target, Amazon.com, Shein, and PDD Holdings-owned Temu are likely to offer aggressive promotions and discounts. The report emphasizes that discounts and promotions are no longer optional but necessary to meet consumer expectations.
Additionally, the shorter shopping window of only 27 days between Thanksgiving and Christmas could lead retailers to launch promotions earlier in the season. A Deloitte forecast suggests that U.S. holiday sales may grow at the slowest pace in six years.
By the numbers, online sales are anticipated to surge by 7.1% compared to last year's holiday season, according to the Mastercard report. Moreover, spending on big-ticket electronics such as televisions and laptops could see a 6.7% increase, driven by factors like lower borrowing costs and the replacement of older gadgets purchased during the pandemic.
In context, the recent interest rate cuts by the Federal Reserve are expected to alleviate some financial pressures for consumers. This move follows 2-1/2 years of battling high inflation, with consumer spending remaining resilient. Government data indicates that the labor market is poised to continue generating steady wage gains, supporting consumer spending and the overall economy.
In conclusion, this forecast highlights the potential trends in holiday season retail sales and the importance of discounts and promotions for retailers. As a consumer, being aware of these projections can help in making informed purchasing decisions during the holiday season.