This holiday season, retail sales in the US excluding automotive are expected to increase by 7.1 per cent year over year (YoY), according to the Mastercard SpendingPulse annual holiday forecast. The key trends to watch include extended holiday shopping; bargain hunting; in-store experiences drawing shoppers to stores; and fashion-forward gifting.

The 2021 holiday season was resurgent for retailers (up 8.5 per cent) as pandemic-induced pent-up demand, excess savings and supply chain issues sent shoppers stocking their carts to secure gifts. This year, the holidays are expected to shape up to be yet another positive retail season.

This holiday season, retail sales in the US excluding automotive are expected to increase by 7.1 per cent year over year (YoY), according to the Mastercard SpendingPulse annual holiday forecast. The key trends to watch include extended holiday shopping; bargain hunting; in-store experiences drawing shoppers to stores; and fashion-forward gifting.

With holiday shopping slated to begin early again this year, some of the season’s retail growth is expected to be pulled forward in October as consumers hunt for early deals. Traditional holiday season is defined from November 1 to December 24. Key promotional days like Black Friday weekend are also expected to make a strong return along with Christmas Eve, which falls on a Saturday, slated to be among the biggest days for retailers and last-minute shoppers.

As inflation impacts consumer wallets, bargain hunting is expected to be in full force this holiday season. From deals and discounts to price monitoring and price matching, consumers are looking to stretch their dollars and get the most bang for their buck. E-commerce is anticipated to increase despite significant growth last year, up 4.2 per cent YoY and 69.2 per cent year over three years (Yo3Y), as the channel remains a convenient way for consumers to check prices in real time, the Mastercard SpendingPulse report said.

From the return of holiday doorbusters to new brick-and-mortar collaborations, retailers are aiming to boost holiday spirits by driving consumers into stores. In-store retail sales are expected to be up 7.9 per cent YoY and 10.4 per cent Yo3Y. While e-commerce has seen marked growth in recent years, in-store spending made up more than 4/5 of retail sales from January through August 2022.

Additionally, following nearly two years of loungewear and athleisure, consumers may be adding revamped wardrobes to their wish lists as social events and platforms have many dressing to impress. Apparel (4.6 per cent YoY / 25.3 per cent Yo3Y) and Luxury (4.4 per cent YoY / 29.6 per cent Yo3Y) are expected to be hot holiday gift sectors, sending consumers into the new year in style.

“This holiday retail season is bound to be far more promotional than the last,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Incorporated. “Easing supply chain issues coupled with the rapid shift in consumer spending trends and over-ordering inventory have left retailers in an interesting position ahead of the holidays. Retailers that were able to clear past merchandise and accurately forecast inventory needs will be the best positioned for growth.”

“This holiday season, consumers may find themselves looking for ways to navigate the inflationary environment – from searching for deals to making trade-offs that allow for extra room in their gift-giving budgets,” said Michelle Meyer, US chief economist, Mastercard Economics Institute. “New job creation, rising wages and lingering savings should have many consumers ready and able to spend.”

The holiday season builds on the momentum seen this summer, with US retail sales excluding automotive in August up 11.7 per cent YoY and 20.4 per cent compared to 2019. Online sales in August grew 8.9 per cent and 100.2 per cent respectively, compared to the same periods.

Fibre2Fashion News Desk (KD)