Consumer Behavior

Consumer spending solid this holiday season

Photo: Generated by AI. Adobe Stock.

January 2, 2025

Retail sales in the U.S., not including automotive sales, increased 3.8% between November 1 and Dec. 24 compared to the same time frame in 2023.

That's a prime finding from the Mastercard SpendingPulse report that measures in-store and online retail sales.

"The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods," Michelle Meyer, chief economist, Mastercard Economics Institute, said in a press release on the report's data. "Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains."

Key retail trends included:

• Empowered consumers sought value at every turn this year, responding to promotions during the November and Black Friday shopping period, and filling their baskets in the run-up to December 24.
• Consumer demand for experiences like dining out strengthened in the holiday season, with Restaurant spending growth up 6.3% compared to last year. Additionally, this season saw an increase in spending growth on goods compared to last year, with Apparel (3.6%), Jewelry (4.0%) and Electronics (3.7%) as notable sectors for gift-giving.
• Consumers increasingly preferred digital-first shopping this year, with e-commerce, curbside pick-up and delivery being top-of-mind for the festive season. Online retail sales grew 6.7% year-over-year, whereas in-store sales increased 2.9%. Notably, the Apparel sector showed a strong lead in e-commerce sales, with 6.7% growth for online purchases compared to last year.

"This holiday season, we saw consumers motivated by deals and retailers respond with promotions to meet the demand," Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc., said in the release. "The value-minded consumer showed up to shop at brick-and-mortar stores and e-commerce platforms, with retailers managing across both to capture attention throughout the season."