Nicole Larson
A Mastercard report showed U.S. retail sales increased 3.1% between November 1st and December 24th as consumers sought last-minute Christmas deals amid big promotions. The rise in holiday retail sales is lower than the 3.7% growth Mastercard predicted in September and last year’s 7.6% increase, as higher interest rates and inflation put pressure on spending. Overall holiday shopping participation increased by just over 1.5 million people in 2023. In turn this was a factor of more people travelling as one-third of Americans traveled more in 2023 than pre-COVID years.
Both the number of shoppers in stores and online increased, but the big winner was really omnichannel where consumers use multiple channels to fulfil their needs. Consumers were drawn to stores for inspiration and to find bargains, especially towards the end of the holiday period. Online tended to be used earlier in the season with people primarily using it for convenience. Despite some good levels of discounting, consumers were hit by inflation which they tried to offset by trading down in some areas which put pressure on volumes.
Total number of people (adults aged 18 and over) who participated in some way in the Christmas occasion:
| In-Store | Online | Total | |
|---|---|---|---|
| 2023 | 168,549,633 | 129,734,870 | 195,737,583 |
| 2022 | 167,246,373 | 127,284,335 | 194,179,000 |
| % Change (2022 to 2023) | +0.78% | +1.93% | +0.80% |
| # Change (2022 to 2023) | +1,303,260 | +2,450,535 | +1,558,583 |
Key retail trends this holiday season included:
- Shopping extravaganzas in-store and online: Spending online increased at a faster pace than in-store as online retail sales increased 5.5% year-over-year while in-store sales were up a more modest 2.7% year over year, but shopping in-store still makes up a considerably larger portion of total retail spending.
- Winter wardrobe wonderland: Apparel was one of the top categories for shoppers this season as consumers shopped for new outfits and upcoming holiday festivities. The sector was up 2.4% year-over-year.
- Season’s eatings: Culinary celebrations continued as family and friends gathered in restaurants to ring in the holidays. The restaurant sector was up 7.8% year over year, while grocery was up 2.1% for the season.
Across the period consumers spent:
| In-Store | Online | Total | |
|---|---|---|---|
| 2023 | $245.46 billion | $39.76 billion | $285.22 billion |
| 2022 | $238.99 billion | $37.68 billion | $276.67 billion |
| % Change (2022 to 2023) | +2.71% | +5.51% | +3.09% |
| # Change (2022 to 2023) | +$6.47 billion | +$2.08 billion | +$8.55 billion |
General Consumer Insight
1. Compared to last Christmas, which of the following did you do this year?
Bought fewer gifts: 62.2%
Socialized more: 58.7%
Traveled more to see family and friends: 53.6%
Had a stricter gifting budget: 51.2%
Bought gifts on discount: 45.3%
2. How do you think the discounts this Christmas compared to last year?
More generous than last year: 35.1%
About the same as last year: 36.9%
Less generous than last year: 21.3%
Unsure: 6.7%
3. Compared to last year, did you buy more or less on impulse this Christmas?
Less: 53.8%
About the same: 34.6%
More: 11.6%
4. Did you use any of the following services when Christmas shopping?
Fast shipping (same day, next day): 65.1%
Order online, collect from store: 60.1%
Gift wrap in store: 28.6%
Buy now, pay later credit: 27.8%
Layaway: 15.5%
Layaway: 15.5%
5. Which, if any, of these problems did you experience when Christmas shopping?
Out of stock in store: 28.8%
Late delivery: 25.4%
Long lines in store: 19.4%
Out of stock online: 17.8%
Delivery not turning up in time for Christmas: 12.9%
Cancelled order: 6.2%
Damaged item: 5.4%
Wrong items being delivered: 5.1%
Aaron Jodka
Anjee Solanki