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MasterCard Report: Holiday Retail Sales Up 3.6%
By Eva Norlyk Smith, Ph.D.
U.S. retail sales improved this Holiday season compared to last year’s bleak performance, according to data released on Monday by SpendingPulse, a unit of MasterCard Advisors. Between November 1 and Christmas Eve, retail sales climbed by 3.6 percent, according to the MasterCard report.
The numbers are a considerable improvement over last year, which went down in history as one of the worst Holiday sales seasons on record; consumers faced with the ongoing credit crisis and mounting financial uncertainty pulled dramatically back on shopping in November-December. The bounce in this year’s Holiday sales may signal that consumer spending is improving even amid tight credit and record unemployment rates, and even as many consumers vowed to cut back on credit card spending. For many retailers, Holidays sales make up as much as 25 to 40 percent of total annual sales.
Online sales were particularly strong, with a 15.5 jump in online purchases, possibly indicating that consumers are becoming increasingly comfortable with using their credit cards online. In addition, some were trapped by snowstorms in the Midwest and on the East Coast, which kept many shoppers at home the weekend before Christmas. Online sales account for about 5 percent of overall retail sales.
Despite the improvement, retail analysts weren’t overly excited about the numbers, which still are below 2007 levels, according to Reuters. Yet, the numbers at least are a significant improvement over last year’s numbers, when consumer spending was in a near free fall.
The Holiday sales report released by SpendingPulse is based on aggregated data from the MasterCard payment network of credit and debit cards purchases (excluding car and gasoline sales) along with estimates of cash and check payments. MasterCard SpendingPulse makes use of the extensive data from the MasterCard network to track and analyze industry performance and report on consumer spending earlier than traditional consumer tracking sources.