2018 Holiday Shopping Season Reaches Six-Year High
It seems as though many retailers have reason to celebrate about now as a new report indicates that the 2018 holiday shopping season was the strongest in years. According to a MasterCard report, this year’s sales (measured from November 1st to December 24th) were up 5.1% over 2017 and managed to top $850 billion. Moreover online sales continued to grow at an accelerated rate, with this year’s numbers besting the previous year’s totals by 19.1%.
Among the verticals experiencing the best gains was home improvement, which saw sales increase 9% over last year. Elsewhere apparel sales also got a nice boost, growing 7.9% year over year — the biggest gain the sector has had since 2010. Despite that, department store sales fell slightly, down 1.3% from 2017. That said online sales for these retailers improved 10.2%. Finally, when it comes to big purchases, electronics and appliances were off from last year (-0.7%) while home furniture sales increased 2.3%.
In a press release announcing this year’s figures, Mastercard senior advisor (and former Saks Incorporated CEO) Steve Sadove elaborated on the findings, saying “From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail.” He added, By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”
The gains documented in Mastercard’s report actually exceed predictions made by the The National Retail Federation. As Reuters notes, the NRF had expected an increase between 4.3% and 4.8% for this season’s sales. However, driven by a strong economy that includes near-full employment, it seems Americans opened their wallets even further both in-store and online.
Thankfully it seems the shopping season wasn’t disrupted by the turbulence on Wall Street. In case you missed it, this Christmas Eve was the worst on record as the Dow Jones Industrial Average plunged more than 650 points. While that particular index managed to retain its bull status, the S&P 500 wasn’t as lucky and is now said to be in a bear market after diving 20% from a 52-week high.
It should also be noted that, while holiday sales were strong overall, it may be too early to see how struggling retailers — namely Sears — were affected. At last check the once-great department store chain, which filed for bankruptcy earlier this year, was still seeing slumping sales. If that’s the case, the iconic retailer may have just seen its final holiday season. Meanwhile Amazon is reporting a “record-breaking” season, shipping billions of gifts with Prime shipping in recent weeks. These two realities mixed with uncertainty about where the economy will go in the next 11 months means it’s really anyone’s guess what the 2019 shopping season will bring.