Budgets are tightening, but spending is not decreasing! US holiday retail sales increased 4% year over year

The Zhitong Finance App learned that according to preliminary data released by Visa (V.US) and Mastercard (MA.US) on Tuesday, consumer demand to replace electronic products and buy new clothes was still strong during the holiday season, despite the pressure of tightening budgets, which contributed to a 4% year-on-year increase in sales of US retailers.

Wayne Best, chief economist at Visa, pointed out in a statement that consumers' shopping decisions are becoming more rational and prudent, and many people use AI tools to search for products and compare prices to maximize the use of their disposable budget. Michelle Meyer, chief economist at the Mastercard Economic Research Institute, added that consumers generally start holiday purchases early and actively take advantage of various promotions to achieve the best value for money.

It is worth noting that retailers launched promotions early to lock in sales; while data from the two major payment giants based on billions of transactions on their networks showed that consumer resilience continued until December.

In terms of specific data, from November 1 to December 21, according to Visa's statistics, US retail sales (excluding automobile, gasoline, and food and beverage consumption) increased 4.2% year on year, slightly lower than the 4.6% increase for the full two months predicted in October. Mastercard's statistics include retail and restaurant stores. Sales increased 3.9% year-on-year during the same period, exceeding the previous 3.6% growth forecast. What needs to be clarified is that the data published by the two institutions is not adjusted for inflation.

Both companies mentioned that early launch promotions and the convenience of shopping at home have jointly boosted the growth rate of online sales to overtake offline physical stores. However, Visa also pointed out that offline stores still dominate consumption, accounting for 73% of transactions and 27% of online transactions.

In terms of categories, consumption growth is led by electronic products. According to Visa data, sales of electronic products such as televisions and smartphones increased 5.8% year over year, followed by the clothing accessories category, which increased 5.3% year over year. Mastercard, on the other hand, said that seasonal promotions and cold weather have stimulated people's demand for new clothes, and the jewelry category has also been favored by more consumers this year.