Santa Claus came to town. And if the most recent retail numbers are to be believed, he showed up on our phones, our computer, tablet and email – maybe even to your furniture store, one of several categories to enjoy an uptick in holiday spending.
And while it’s still too soon to measure holiday retail sales, a wave of post-Christmas data puts the industry on track to meet record-breaking expectations. MasterCard SpendingPulse — which tracks retail spending trends — said holiday sales saw the strongest growth in the past six years, surging 5.1 percent to more than $850 billion. This puts holiday retail sales on track to soar past a forecast released earlier this year by The National Retail Federation, which predicted sales would increase by 4.3 percent to 4.8 percent, to a range of $717.45 billion to $720.89 billion. To put that into perspective, the NRF put the average annual increase at about 3.9 percent over the previous five years.
MasterCard SpendingPulse reported on holiday shopping from Nov. 1 through Dec. 24. Cold and wet weather posed some issues during Black Friday and the run-up to Christmas, but shoppers still managed to open their wallets. Apparel saw a growth rate of 7.9 percent compared with last year, according to the report. How did home furnishings fare? The report said the category grew by 2.3 percent.
Retailers know that to position themselves for strong sales, they have to meet customers wherever they’re looking to buy, said Neil Saunders, managing director of research firm GlobalData Retail. Stores with a strong bricks-and-mortar presence, along with easy online shopping options, hooked consumers who went searching for both.
Even with the encouraging early sales figures, Saunders said he’s keeping an eye on profit numbers. Retailers are facing a “toxic mix of rising costs,” Saunders said, with higher labor and tariff costs weighing on their bottom lines.
“The main question now is can retailers keep this performance going as we move into 2019?” Saunders said.