Mastercard Forecasts Higher Holiday Spending

Mastercard is predicting a “rebalancing” in consumer spending for the 2023 holiday season.

The company on Tuesday (Sept. 19) announced that its SpendingPulse shows retail sales increasing 3.7% for the period between Nov. 1 and Dec. 24. That figure — for in-store and online sales across all payment forms — is not adjusted for inflation.

Last year, Mastercard said in a news release, inflationary pricing, pent-up demand, excess savings and increasing wages all allowed consumers and retailers to navigate the season. This year, the company said, will bring a “rebalancing” across categories, sectors and channels that align with macroeconomic trends.

“While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,” said Michelle Meyer, U.S. Chief Economist, Mastercard Economics Institute.

“We expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles,” she added.

Those choices might be especially difficult this year, Amber Carroll, senior vice president of membership and lifecycle strategy at LendingClub, told PYMNTS in an interview Tuesday.

Between mounting credit card debt and non-essential spending pushing some consumers into paycheck-to-paycheck status, people “really need to take a pause and figure out how they can reassess” those transactions, Carroll said.

That reassessment will be particularly important before and during the holiday shopping season, which Carroll called “one of the most financially stressful times of the year … as well as the most tempting. We all know gift-giving is a love language.”

But this year might bring a pullback, as financially stressed families grow more cautious about damaging their financial standing.

Carroll emphasized that it’s a good strategy to take stock of one’s financial position and to follow the path of “making different choices on that nonessential spend” and perhaps even save a bit by negotiating monthly bills when possible.

Also Tuesday, a trio of retailers announced holiday hiring plans that are in line with last year’s numbers: Target plans to hire 100,000 seasonal workers, 1-800-Flowers.com aims to hire 8,000, and Kroger plans to hire “thousands of associates.”

A fourth retailer, Macy’s, plans to hire 3,000 fewer workers for seasonal positions than last year, Reuters reported, while Bath & Body Works — which did not announce hiring plans in 2022 — hopes to add 2,500 workers this year.