Consumers are expected to spend 7.1% more on retail goods during this year’s holiday season than they did last year, according to the Mastercard SpendingPulse annual holiday forecast.
According to a Monday (Sept. 12) press release, the Mastercard Economics Institute said the growth in retail sales — which excludes automotive sales — is forecast to include a 4.2% rise in eCommerce sales and a 7.9% increase in in-store sales.
“New job creation, rising wages and lingering savings should have many consumers ready and able to spend,” Mastercard Economic Institute U.S. Chief Economist Michelle Meyer said in the release.
With jobs holding strong, consumers are continuing to spend, according to the company’s “Holiday Season Retail Insights 2022” report. However, consumers are also facing rising inflation, which may lead some to start shopping earlier in order to look for bargains. Stores might also be encouraged to offer holiday doorbusters, per the release.
“This holiday season, consumers may find themselves looking for ways to navigate the inflationary environment — from searching for deals to making trade-offs that allow for extra room in their gift-giving budgets,” Meyer said.
Retail sales excluding automotive have been growing all summer, with the total recorded in August being up 11.7% year over year. Broken down by channel, that month’s eCommerce sales were up 8.9% and in-store sales were up 12.3%, according to the release.
Last year’s holiday season retail sales were up 8.5% as consumers returned to shopping after pandemic lockdowns and began spending some of the money they had saved during that time.
Read more: US Consumers Say They’ll do Half of Their Remaining Holiday Shopping Online
During last year’s holiday shopping season, PYMNTS research found that 66% of holiday shoppers had made at least one of their purchases online. The “Holiday Shopping 2021: Online Sales Still Beat In-Store Shopping” report also found that 47 cents out of every dollar would be spent online.
As PYMNTS reported in early December 2021, these trends suggest that merchants should provide consumers with the digital payment and ordering features they want.