Holiday spending saw a bump this season as Americans wrestled with high inflation, a new report shows.
Between Nov. 1 and Dec. 24, U.S. retail sales increased by 7.6% compared to the same period in 2021, according to the latest Mastercard Spending Pulse report.
Mastercard's report, which tracks both in-store and online retail sales, excludes automotive sales.
"Consumers and retailers navigated the season well, displaying resilience amid increasing economic pressures," Michelle Meyer, the Mastercard Economics Institute's North America chief economist, said in a statement.
Nonetheless, inflation remains a concern for many Americans.
In fact, 46% of Americans believe the rate of inflation will be higher six months from now, according to a YouGovAmerica and Economist survey conducted between Nov. 26 and Nov. 29. Additionally, 78% of Americans say inflation has become a crisis, according to a survey by real-estate data company Clever.
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Online shopping increased in 2022
A significant part of holiday shopping took place online this year. Online sales grew by 10.6% year-over-year and e-commerce accounted for 21.6% of retail sales, compared to 20.9% in 2021, according to the Mastercard survey.
"This holiday retail season looked different than years past," Steve Sadove, a senior advisor for Mastercard and the former CEO and chairman of Saks Incorporated, said in a statement. "Retailers discounted heavily but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic."
Out of all shopping categories examined, restaurant spending saw the biggest year-over-year boost, the Mastercard survey said.
Restaurant spending increased by 15.1%. Meanwhile, electronic sales dropped by 5.3% and jewelry sales dipped by 5.4%.
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Inflation impacted shopping habits
Not only was inflation tied to increased holiday spending in 2022, it also changed some people’s shopping habits.
Online food and beverage sales were expected to grow by 22.9% from the previous year, while health and personal care sales were expected to increase by 21%, according to a projection by Insider Intelligence and eMarketer. Sales of apparel and accessories were projected to increase by 10.9%.
"Everyday essentials will outperform as traditional holiday categories falter," Insider Intelligence and eMarketer said in its report. "We expect consumers to shift their budgets toward groceries and household essentials and steer away from discretionary categories."
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