US retail sales, excluding automotive, are projected to experience a 3.7% year-over-year (YOY) increase during the upcoming holiday season running from 1 November to 24 December.
This anticipated growth, announced by Mastercard, reaffirms the ongoing resilience of American consumers.
Mastercard SpendingPulse, which tracks both in-store and online retail sales across various payment methods, provides this data without adjusting for inflation.
Inflation and pent-up demand
Looking back at the 2022 holiday shopping season, it was characterised by inflationary pricing and pent-up consumer demand. The combination of these factors, along with increased savings and rising wages, enabled both consumers and retailers to navigate the season successfully.
After a period of fluctuating inventory and spending patterns, the 2023 holiday season is expected to bring a more comprehensive rebalancing across various product categories, shopping channels and economic sectors in alignment with broader macroeconomic trends.
2023 key trends: diverse shopping habits, tech and dining out
Spreading cheer across channels: In 2023, consumers are projected to adopt an omnichannel approach, seeking to make purchases in-store and online, anytime and anywhere.
E-commerce is expected to witness a notable YOY increase of +6.7%. Meanwhile, in-store sales are forecasted to grow by +2.9%.
Tech the halls: Electronics, gadgets and gaming items are likely to top many holiday wish lists as AI, immersive experiences and digital workspaces continue to reshape work and leisure.
Furthermore, consumers who invested in new gadgets during the pandemic may be inclined to upgrade to the latest models, leading to a projected YOY increase of +6.0% in electronics sales during the season.
Festive feasting: The restaurant sector is anticipated to sustain its growth momentum with a YOY increase of +5.4%, surpassing grocery sales growth (+3.9%).
Consumers are expected to make plans for shared meals, activities and celebrations outside their homes, emphasising the importance of dining experiences during the holidays.
Retailers preparing for selective and value-focused shoppers
Mastercard senior advisor and former CEO and Chairman of Saks Incorporated Steve Sadove emphasised the competition for consumer dollars during this holiday season.
With numerous choices available and tightening budgets, shoppers are expected to become increasingly selective and value-focused.
To succeed, retailers are advised to tailor their strategies to meet consumers' preferences, which may range from personalised promotions to enhancing in-store experiences.
