NATIONAL NEWS

Holiday sales up 7.6% despite the squeeze of inflation

Dec 26, 2022, 11:17 AM
Shoppers walk through The Grove shopping mall during the holiday shopping season, three days before...
Shoppers walk through The Grove shopping mall during the holiday shopping season, three days before Christmas, on December 22, 2022 in Los Angeles, California. According to the Commerce Department, November retail sales fell by 0.6 percent, the largest monthly drop this year. (Photo by Mario Tama/Getty Images)
(Photo by Mario Tama/Getty Images)

NEW YORK (AP) — Holiday sales rose this year as American spending remained resilient during the critical shopping season despite surging prices on everything from food to rent, according to one measure.

Holiday sales rose 7.6, a slower pace than the 8.5% increase from a year earlier when shoppers began spending the money they had saved during the early part of the pandemic, according to Mastercard SpendingPulse, which tracks all kinds of payments including cash and debit cards.

Mastercard SpendingPulse had expected a 7.1% increase. The data released Monday excludes the automotive industry and is not adjusted for inflation, which has eased somewhat but remains painfully high.

U.S. sales between Nov. 1 and Dec. 24, a period that is critical for retailers, were fueled by spending at restaurants and on clothing.

By category, clothing rose 4.4%, while jewelry and electronics dipped roughly 5%. Online sales jumped 10.6% from a year ago and in-person spending rose 6.8%. Department stores registered a modest 1% increase over 2021.

“This holiday retail season looked different than years past,” Steve Sadove, the former CEO and chairman at Saks and a senior advisor for Mastercard, said in a prepared statement. “Retailers discounted heavily, but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic.”

Some of the increase reflected the impact of higher prices across the board.

Consumer spending accounts for nearly 70% of U.S. economic activity, and Americans have remained resilient ever since inflation first spiked almost 18 months ago. Cracks have begun to show, however, as higher prices for basic necessities take up an increasingly large share of everyone’s take-home pay.

Inflation has retreated from the four-decade high it reached this summer, but it’s still sapping the spending power of consumers. Prices rose 7.1% in November from a year ago, down from a peak of 9.1% in June.

Overall spending has slowed from the pandemic-infused splurges and shifted increasingly toward necessities like food, while spending on electronics, furniture, new clothes and other non-necessities has faded. Many shoppers been trading down to private label goods, which are typically less expensive than national brands. They’ve been going to cheaper stores like dollar chains and big box stores like Walmart.

Consumers also waited for deals. Stores expected more procrastinators to hit stores in the last few days before Christmas compared with a year ago when people began shopping earlier due to a global disruption of the supply chain that created thousands of product shortages.

“Consumers are trying to spread out their budget, and they are evaluating and shopping at different stores,” said Katie Thompson, the lead of consultancy Kearney’s Consumer Institute.

In November, shoppers cut back sharply on retail spending compared with the previous month. Retail sales fell 0.6% from October to November after a sharp 1.3% rise the previous month, the government said in mid-December. Sales fell at furniture, electronics, and home and garden stores.

A broader picture of how Americans spent their money arrives next month when the National Retail Federation, the nation’s largest retail trade group, comes out with its combined two-month results based on November-December sales figures from the Commerce Department.

The trade group expects holiday sales growth will slow to a range of 6% to 8%, compared with the blistering 13.5% growth of a year ago.

Analysts will also be dissecting fourth-quarter financial results from major retailers in February.

KSL 5 TV Live

Top Stories

National News

Former U.S. President Donald Trump speaks during an election night event at Mar-a-Lago on November ...
Meg Kinnard and Michelle L. Price

Trump says beating of Nichols ‘never should have happened’

Former President Donald Trump says the footage of the brutal beating of Tyre Nichols by five Memphis police officers is “horrible” and that the attack “never should have happened.”
1 day ago
One the of climbers in the training camp climbing a wall. (KSL-TV's Alex Cabrero)...
Alex Cabrero

USA Climbing Camp for Paris 2024 begins in Salt Lake City

As the Summer 2024 Olympic Games draws closer, those athletes looking to participate begin their training. 
1 day ago
MEMPHIS, TENNESSEE - SEPTEMBER 7:  Police investigate the scene of a reported carjacking reportedly...
Adrian Sainz

Memphis police disband unit that fatally beat Tyre Nichols

The Memphis Police Department has disbanded the special unit whose officers beat to death motorist Tyre Nichols
1 day ago
Demonstrators participate in a protest against the police killing of Tyre Nichols on January 27, 20...
Adrian Sainz, Associated Press

Memphis authorities release video in Tyre Nichols’ death

Video showing five Memphis officers beating Tyre Nichols, a Black man, has been made public.
2 days ago
An apparent shortage of pharmacists is forcing CVS and Walmart to reduce the hours of its pharmacie...
Jordan Valinsky

CVS and Walmart cut pharmacy hours, close some locations earlier, citing staffing shortage

An apparent shortage of pharmacists is forcing CVS and Walmart to reduce the hours of its pharmacies, as they close earlier in thousands of locations.
2 days ago
Video of the attack on Paul Pelosi at his San Francisco home was released after a California court ...
Jeremy Herb, Jack Hannah and Jack Forrest

Court releases video of attack on Paul Pelosi

The San Francisco Superior Court on Friday released video and audio recorded during last year's attack on Nancy Pelosi's husband, Paul Pelosi, including police body-cam footage depicting the moment of the attack and the alleged assailant's police interview where he admitted he wanted to hold the then-House speaker hostage.
2 days ago

Sponsored Articles

Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t Let a Ransomware Attack Get You Down | Protect Your Workplace Today with Cyber Insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Holiday sales up 7.6% despite the squeeze of inflation