The Mastercard SpendingPulse annual holiday forecast is predicting that U.S. retail sales will increase 7.1% year over year, excluding automotive sales.
2022 Holiday Retail Sales Forecast from Mastercard
The forecast measured in-store and online retail sales across all forms of payment, and it is not adjusted for inflation. The positive prediction comes after a promising summer where with U.S. retail sales (excluding automotive) increased 11.7% year over year in August, which is a 20.4% increase compared to 2019.
Online Small Business Growth
The forecast by Mastercard reveals online sales in August grew by 8.9% year on year, which is an enormous 100.2% growth since 2019. Mastercard note that sectors offering customers experiences have been particularly successful of late, including businesses such as restaurants, airlines and lodging, which all saw strong double-digit growth.
Many Consumers ‘Ready and Able to Spend’
The U.S. Chief Economist at the Mastercard Economics Institute, Michelle Meyer, explained why consumers may look to spend more in the coming holiday season, saying: “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. New job creation, rising wages and lingering savings should have many consumers ready and able to spend.”
The senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, Steve Sadove, added: “This holiday retail season is bound to be far more promotional than the last. Easing supply chain issues coupled with the rapid shift in consumer spending trends and over-ordering inventory have left retailers in an interesting position ahead of the holidays. Retailers that were able to clear past merchandise and accurately forecast inventory needs will be the best positioned for growth.”
Consumer Spending Trends
A trend likely to impact retail sales will be the extended holiday shopping undertaken by consumers. As they hunt for early deals, a lot of the holiday season’s growth will be pulled forward to October. Bargain hunting along with an abundance of deals and discounts will also be helping to drive sales.
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