Prime Highlights
- U.S. shoppers remained active during the holiday season, helping retail spending grow despite inflation concerns.
- Online shopping and electronics purchases played a major role in boosting overall sales.
Key Facts
- E-commerce sales increased by 7.8% compared with last year, driven by convenience and early holiday deals.
- Electronics sales rose 5.8%, making it the strongest-performing category of the season.
Background:
U.S. consumers delivered a solid performance during the latest holiday shopping season, pushing retail spending up by 4.2% year over year, according to preliminary data released by Visa. The figures, which are not adjusted for inflation, point to steady consumer demand even as economic uncertainty and price pressures continued to influence household budgets
The data, compiled by Visa Consulting and Analytics, tracked retail payment activity over a seven-week period starting November 1. It covers core retail categories while excluding automotive, gasoline and restaurant spending. Despite ongoing worries about inflation and weaker consumer confidence compared with last year, shoppers stayed active during the holiday season, especially when buying technology products and personal items.
Shopping in physical stores continued to make up most holiday spending, accounting for around 73% of total retail payments. However, online shopping drove most of the growth. Online sales rose 7.8% from last year as shoppers chose convenience, discounts and early holiday deals. Easy price checks and faster checkout also helped boost online purchases.
Electronics performed the best, with sales increasing by 5.8%. Visa said the increase was due to many shoppers upgrading devices such as smartphones and laptops. Clothing and accessories also saw good demand, with sales rising 5.3%. General merchandise stores reported a 3.7% increase, as shoppers chose stores where they could buy many items in one visit.
Other categories were weaker. Spending on building materials and garden products dropped by 1%, showing that shoppers focused more on gifts rather than home projects. Furniture and home furnishings remained mostly unchanged, with sales increasing just 0.8%.
While holiday spending grew overall, the figures do not account for inflation. As a result, the actual increase in the number of items bought may be smaller. Visa estimates that spending adjusted for inflation rose by about 2.2%, which is still a positive result given the uncertain economic environment.
Overall, the data shows a gap between how consumers feel and how they spend. While many Americans said they planned to spend less during the holidays, their actual purchases suggest a cautious but steady level of confidence toward the end of the year.
