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In a season marked by rising prices, U.S. consumers proved they’re still ready to spend – as long as they get a good deal.
Total U.S. holiday retail sales saw a 3.8% jump year-over-year, according to Mastercard (MA+0.20%) SpendingPulse data, with online shopping surging 6.7% while in-store purchases grew by a more modest 2.9%. The final countdown to Christmas proved crucial, with the last five days generating 10% of total holiday spending.
“The value-minded consumer showed up to shop,” said Steve Sadove, senior advisor for Mastercard, noting retailers’ success in managing both digital and physical channels.
Sophisticated mobile apps, real-time inventory tracking, and AI-powered recommendations further streamlined the online shopping experience. Cyber Monday remained the key retail event for budget-conscious shoppers.
Regional differences emerged sharply, with Phoenix (10.0%) and Tampa (10.6%) reporting double-digit increases in online sales, while Minneapolis (8.9%), Dallas (8.4%), Charlotte (7.9%), Orlando (7.8%), and Houston (7.6%) all outpaced the national average.
Beyond traditional retail categories, gift-giving sectors showed solid growth, with jewelry up 4.0%, electronics rising 3.7%, and apparel increasing 3.6%. But experiences were one of the top draws, with restaurant spending jumping 6.3% year-over-year. Value-focused promotions at casual dining spots like Chili’s (EAT+15.58%), Olive Garden (DRI+0.98%) and Longhorn Steakhouse helped drive consistent traffic.
Throughout the season, successful retailers demonstrated their understanding of a new consumer mindset. “Consumers consistently demonstrated their willingness to spend this season, but they were strategic about finding deals,” said Michelle Meyer, chief economist at Mastercard Economics Institute. “The most successful retailers recognized and responded to this value-hunting behavior.”