Northwest Arkansas Democrat-Gazette
Retail fairly merry
Holiday spending reported up, if only 3%.
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 Saturday 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% compared with 2019.
As expected, a surge in online shopping fueled much of the spending. Online sales rose a record 49% year-overyear 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.
Steve Sadove, senior adviser for Mastercard and former chief executive officer and Chairman of Saks Inc., said the surge in online spending and the early shopping were “a testament to the holiday season and strength of retailers and consumers alike.”
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. More than 40 U.S. retailers have filed for Chapter 11 bankruptcy protection since the pandemic started forcing shutdowns in March.
Holiday department store
sales fell 10.2% year- overyear, according to Mastercard. Spending on apparel plunged 19.1%, and jewelry sales fell 2.3%.
Shoppers instead invested in their homes. Furniture and furnishing sales increased 16.2%, while spending on home improvement rose 14.1%. Consumers also favored electronics and appliances, a category where sales rose 6%.
Clothing stores and specialty retailers offered big discounts and promoted curbside pickup in the hopes of rescuing the holiday season and surviving a difficult year. There was some payoff, as online clothing sales rose 15.7%, according to Mastercard. E-commerce sales at department stores also ticked up 3.3%.
According to JPMorgan Chase, which tracks activity on 30 million of its debit and credit cards, spending from roughly Oct. 30 through Dec. 14 was down 5.4% from the equivalent period last year.
Along with 40 retailers filing for bankruptcy protection, more than 8,600 stores have closed this year, according to Coresight Research. Just in the past month, music chain Guitar Center Inc. and clothier Francesca’s Holdings Corp. filed for Chapter 11 bankruptcy. Meanwhile, retailers like Neiman Marcus and J.C. Penney that emerged from bankruptcy this fall are looking to regain their footing.