Despite every possible stumbling block that could be placed in the way of retailers and customers this holiday season, Mastercard SpendingPulse announced Monday that year-over-year spending rose 8.5% compared to the 2020 holiday. They had expected a 7.4% increase. The retailer’s record sales also beat pre-pandemic 2019 by 10.7%.
The Mastercard data, has given us one of the first glances at the 2021 holiday sales season. They tracked both in-store and online retail sales running from November 1, through December 24, across all forms of payment, not including automotive sales.
As early as October 27th after an unusually early shopping start, the National Retail Federation (NRF) had predicted between 8.5% to 10.5% increase in year-over-year spending. And that was before the Covid-19 Omicron variant was announced by the CDC in late November. Many retail watchers, I included, were a bit weary that the combination of the end of stimulus, the continuing pandemic spikes, runaway inflation (rising over 5.7% year-over-year), and the much-publicized supply chain issues would undercut the NRF’s predictions.
But among the early stats the one that really got my attention was Mastercard’s announcing that e-commerce sales for the holiday made up 21% of total spending, or one in five purchases. That represents a 61.4% increase over their 2019 stats.
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The fact that despite the new Covid-19 variants, many of us have immerged from our bunkers, and are readdressing our dressing. Sales of apparel and jewelry were up 47.3% and 32% respectively over 2020, and up 29% and 26.2% over 2019. Electronics were also up 16.2% over 2020.
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Retail consultant Jan Kniffen, on Monday’s CNBC’s “The Exchange” said the past two months may go down as the “best holiday selling ever.” He has been impressed by consumers’ willingness to keep spending and retailers’ ability to generate great sales numbers, despite the backdrop of congested ports, labor shortages, wage increases and staggering inflation.
Looking forward both retailers and consumers are hoping that the supply chain issues that have become omnipresent throughout every aspect of our lives will soon wane. However, Target CEO Brian Cornell recently told The Associated Press (AP) that he thinks it will take “several years” for supply chain clogs to be cleared. One can hope, for once Brian Cornell might be wrong, though I wouldn’t bet against him.