Sales rise as shoppers invest in their homes

NEW YORK — Retail sales increased a modest 3% during a longer holiday season this year, as homebound shoppers spent more on furnishing and food but less on clothing and jewelry, according to figures released over the weekend by a firm that tracks all forms of payments.

The increase fell short of predictions from the National Retail Federation, the nation’s largest retail trade group, which had expected sales to rise between 3.6% and 5.2% this year compared with 2019.

As expected, a surge in online shopping fueled much of spending. Online sales rose a record 49% year-over-year between Oct. 11 and Dec. 24, according to the Mastercard SpendingPulse figures, which exclude services, automotive and gasoline sales.

The holiday shopping season was considered longer this year as retailers offered promotions sooner and encouraged customers to get a jump-start to avoid delivery delays. During the traditional holiday period, between Nov. 1 and Dec. 24, retail sales rose 2.4% year-over-year, according to Mastercard’s data.

Buying trends benefited e-commerce giant Amazon and big-box stores like Target and Walmart, which already had robust e-commerce operations and were allowed to stay open during the pandemic, attracting shoppers who wanted to avoid visiting multiple stores.

But the pandemic has been detrimental for smaller shops, clothing brands and department stores, which had already been struggling to adapt to the rise of online shopping.

Shoppers did invest in their homes. Furniture and furnishing sales increased 16.2%, while spending on home improvement rose 14.1%. Also favored were electronics and appliances, a category where sales rose 6%.