The 2017 Holiday Season Could Be the Start of Retail's Big Comeback

Randal Sanchez
December 28, 2017

Mastercard SpendingPulse today reports that holiday sales increased 4.9 percent this year, setting a new record for dollars spent. Sales, excluding automobiles, rose 4.9% from November 1 through Christmas Eve, compared with a 3.7% gain in the same period previous year, according to the Mastercard Inc. unit, which tracks all forms of payment.

Year-end sales rose almost 5 percent compared with 2016.

Online sales, which were up 18.1 percent for the season, contributed to the large growth in total retail sales.

While the season is shaping up to be very good for retailers overall, they aren't all sharing equally in consumers' holiday cheer, Quinlan said.

E-commerce sales rose 18.1% YoY, beating even the high end of the NRF's predictions, which projected 11-15% YoY growth in non-store sales for the holiday season.

Shares in JC Penney Co Inc rose 7.6 percent on Tuesday, while Kohl's Corp shares were up 5.8 percent, Macy's Inc rose 5.1 percent and Nordstrom Inc increased 2.8 percent.

"Evolving consumer preferences continue to play out in the aisles and online sites of retailers across the USA", said Sarah Quinlan, senior vice president of Market Insights for Mastercard in a release.

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In a year that saw malls closing their doors across the country, American shoppers spent almost $600 billion over the holiday season, making it the largest increase in holiday spending for the last six years.

The report says the sales increase is a new record for the number of dollars spent, but no figure was released.

"It has been an extremely positive holiday season in terms of sales both for brick-and-mortar and for online businesses", said Shelley Kohan, a Retail Fellow at analytics firm RetailNext.

Although Quinlan admitted that the strong US economy was a contributing factor, an upgraded customer experience also helped.

Retailers' heavy early-season promotions paid off, with the first three weeks of November seeing significant jumps.

Shoppers across the US were spending large sums of money prior to the tax bill by the Republicans that promised tax cuts was passed, said reports that analyzed holiday spending habits.

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