Mastercard Data Shows 5.1% Holiday Sales Gain, Apparel Soars

Retail holiday sales from Nov. 1 through Christmas Eve came in stronger than prior estimates, according to Mastercard Spending Pulse, which showed a 5.1 percent gain. Analysts and industry associations such as the National Retail Federation pegged sales to show a robust year-over-year gain of between 4 percent and 5 percent.

Steve Sadove, senior adviser at Mastercard and former chief executive officer and chairman of Saks Inc., said from “shopping aisles to online carts, consumer confidence translated into holiday cheer for retail.”

But as WWD previously reported, higher sales are likely to result in weaker gross margins due to several factors including the variable costs of e-commerce. Still, the results revealed the biggest winner of the season: the consumer.

Click here to read the WWD “Holiday Scorecard” report and gross margin impact story.

“By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels,” Sadove added.

Mastercard crunches the numbers across all types of payments including cash, credit and debit. The 5.1 percent year-over-year gain translated into $850 billion, which the firm said was the strongest in six years. Mastercard analysts also said online shopping soared 19.1 percent this season compared to 2017. The gain was well ahead of the 15 to 16 percent gain analysts were expecting.

Researchers at Mastercard said some of the key findings of the report “indicate that despite weather challenges, this was a winning holiday season for retail overall; however, the story was different category by category.”

With a gain of 7.9 percent, apparel was a top category, according to Mastercard. “The category followed through on a strong momentum that started during the back-to-school season and accelerated through fall right up to Christmas,” authors of the report stated.

Home improvement came in with a 9 percent gain while the traditional department store segment closed the season with a 1.3 percent decline. “This follows two years with growth below 2 percent, some of which can be attributed to store closings,” Mastercard said. “However, the online sales growth for department stores indicated a more positive story, with growth of 10.2 percent.”

Appliances and consumer electronics showed a 0.7 percent decline while home goods and furniture rose 2.3 percent.

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