By Savyata Mishra
(Reuters) -U.S. retail sales rose 3.8% between Nov. 1 and Dec. 24, as intense promotion to drum up sales in what was expected to be a highly competitive holiday season for retailers prompted last-minute shopping among consumers.
The sales jump was well above a 3.1% increase last year, handily beating Mastercard (NYSE:)’s forecast in September of a 3.2% rise, with the last five days of the season accounting for 10% of all holiday spending.
Major retailers including Walmart (NYSE:), Target (NYSE:) and Amazon.com (NASDAQ:) ramped up promotions and value messaging to entice customers amid a shorter-than-usual holiday season with just 23 days before Christmas.
“The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods,” said Michelle Meyer, chief economist at Mastercard Economics Institute.
Online sales rose at a faster pace of 6.7%, compared with a 6.3% rise last year, with the apparel segment seeing strong demand.
Mastercard said consumers were “value-minded” and shopped at both brick-and-mortar stores and online platforms in search of attractive deals.
Low-cost e-commerce firms Shein and PDD Holding’s Temu as well as short-video app TikTok witnessed a surge in popularity ahead of Black Friday and Cyber Monday shopping events.
Retailers also experimented with generative AI for customer service and product search, and tried to improve curbside pick-up and delivery services, as they jostled to offer a smooth shopping experience.
Walmart and Amazon.com saw record-breaking sales on Black Friday and Cyber Monday, spending data earlier this month showed. In contrast, Target and Best Buy (NYSE:) struggled to drive sales.
Consumers showed strong preferences for experiences such as dining out, with restaurant spending growth up 6.3% from last year, Mastercard data showed.
Shopping on gift items was also higher than last year, boosting demand for apparel, jewelry and electronics, with each category rising 3.6%, 4% and 3.7%, respectively, according to the report.
Analysts were expecting a mixed holiday season, with muted spending in stores on key shopping days such as Black Friday.
Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment. The data excludes automotive sales and is not adjusted for inflation.
