US 2017 Holiday Spending at Record Level

U.S. shoppers increased their spending this holiday season by 4.9% year over year and set a new record for total dollars spent. Online spending rose 18.1% year over year on a late-season rally.

The data were released Tuesday by Mastercard in its SpendingPulse report on shopping between November 1 and December 24.

Retailers generally had a good holiday seasons, but results varied by category. Spending was also driven by heavy early-season promotional pricing. That boosts sales but can have a negative effect on profits.

Sarah Quinlan, senior vice-president of Market Insights at Mastercard, said:

Evolving consumer preferences continue to play out in the aisles and online sites of retailers across the U.S. Overall, this year was a big win for retail. The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.

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Among other key findings of the SpendingPulse report, Mastercard noted:

• For many shoppers, there was no place like home this holiday season. Electronics and appliances increased 7.5 percent, the strongest growth of the last 10 years. The home furniture and furnishings category grew 5.1 percent, as did home improvement.
• Specialty apparel and department stores, which both traditionally see the bulk of sales happen in-store, saw moderate gains. This is particularly impressive given recent store closings.
• Retailers’ heavy early-season promotions paid off, with the first three weeks of November seeing significant jumps.
• In addition, shoppers were still spending late into the season, with December 23 next to Black Friday in terms of single-day spending. This was a boon to certain categories, including jewelry. Jewelry grew 5.9 percent, largely driven by last-minute sales.

The SpendingPulse report does not include auto sales and are based on aggregate sales activity in the Mastercard payments network and other survey data.

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