Report: Retailers see big increase in holiday sales

Consumer confidence, robust online shopping activity and a slew of procrastinators helped boost holiday retail sales this year to record-setting numbers, preliminary reports show.

Holiday sales increased 4.9 percent over the previous year, marking the largest year-over-year increase since 2011, according to the latest Mastercard SpendingPulse report, which tracks retail spending by all payment types. Its figures do not include automotive sales.

“Overall, this year was a big win for retail,” said Sarah Quinlan, senior vice president of market insights at Mastercard.

Many retailers had aggressive promotions early in the holiday season – between Nov. 1 through Christmas Eve – and it showed with “significant jumps” in sales the first three weeks of November, the Mastercard report stated.

But shoppers also continued spending right up until the last minute: Dec. 23, a bonus Saturday before Christmas Eve, was second only to Black Friday for spending in a single day this year, Quinlan said. That extra day to shop made a “huge” difference, given that Christmas fell on a Monday this year, she added.

“[When] two people in a family are working, weekends are the time to do everything – life management as well,” Quinlan said. “To give them two days to do this type of regular shopping, it’s so important for them.”

According to the report, last-minute shoppers were largely responsible for a 5.9 increase in jewelry sales. (“Men waited to the last minute,” Quinlan noted. “Always have.”)

Some retail categories saw higher increases than others: There was a 7.5 percent increase in sales of electronics and appliances this holiday period, the largest jump in the last decade. Sales in the home furnishings and home improvement categories each jumped 5.1 percent.

There were moderate increases for specialty apparel and department stores, despite a lackluster year overall that saw thousands of brick-andmortar store closings. However, the women’s apparel category in particular was negative over the entire year, according to Mastercard data.

“We really have fallen out of love with clothes in the United States,” Quinlan said. “It really shows changing tastes of the woman. She was really such an important driver in clothes and she’s really not anymore.”

The National Retail Federation said it would not have its own data ready until mid-January – but predicted final holiday retail sales figures would meet or exceed its October forecast of a 3.6- to 4-percent increase.

“This holiday season’s big winners – in addition to consumers – were retailers of all shapes and sizes across all segments,” Matthew Shay, president and chief executive of the National Retail Federation, said in an email. “From online and luxury retailers to department and discount stores, from Main Street to mega stores and everything in between, traffic and sales were generally up.”

Similarly, Mark A. Cohen, the director of retail studies at Columbia Business School, cautioned against reading too much into preliminary numbers, since a variety of factors could still affect retailers’ gross margins from the holiday season.

“The real tale of the tape won’t be known until February and March,” Cohen said. “Free shipping is enormously expensive. Returns are enormously problematic, especially for e-commerce players. And this very expansive consumer is now going to hibernate for a while.”

Still, he said it was generally a “very strong end to a rather lackluster and inconsistent year,” attributable in part to a healthy economy.

“The economy has been booming,” Cohen said. “Unemployment is at the very lowest point in eight years – even though there remain folks who are unemployed who are not being counted, and there are still folks who are underemployed. The fact is there are employment rolls are high, consumer confidence seems to be remarkably high, disposable income is therefore robust and consumers seem to be once again loading their credit cards.”

Online retail continues to be the clear winner, Cohen said, led by behemoth Amazon.com. On Monday, Amazon announced record-breaking sales from the 2017 holiday season, with more than 1 billion items ordered worldwide. In a single week alone, more than 4 million people signed up for a trial of Amazon Prime, a premium membership that comes with expedited shipping and other benefits. (Jeffrey P. Bezos, founder and chief executive of Amazon, also owns The Washington Post.)

Amazon’s preliminary data also showed many online shoppers waited until the last minute as well. The company’s “peak day of customer fulfillment” this year was Dec. 19. The very last order to make it in time for Christmas through Prime Now – Amazon’s same-day, intracity delivery service – was delivered in Baltimore at 11:58 p.m. on Christmas Eve. The order included a remote-control car, a 28-pack of crayons and a mock remote control for toddlers, the company noted.

“Years ago you had to shop from a website on Cyber Monday” to guarantee delivery by Christmas, Cohen said. “Now you can shop from the 20th or the 21st or even the 22nd and still have that surety. The knowledge that these e-commerce players are getting better and better at fulfilling these promises no doubt also induced customers.”