Holiday spending increased in 2022 amid high inflation

Retail sales for the 2022 holiday shopping season are up nearly 10%: MasterCard.

Holiday spending rebounded this season as Americans struggled with soaring inflation, a new report showed.

Between November 1 and December 24, US retail sales rose 7.6% compared to the same period in 2021, according to Mastercard’s latest Spending Pulse report.

The Mastercard report, which tracks in-store and online retail sales, excludes auto sales.

“Consumers and retailers have weathered the season well, showing resilience amid mounting economic pressures,” Michelle Meyer, chief North America economist at Mastercard Economics Institute, said in a statement.

However, inflation remains a concern for many Americans.

In fact, 46% of Americans think the inflation rate will be higher six months from now, according to a YouGovAmerica and Economist survey conducted between November 26 and 29. In addition, 78% of Americans say inflation has become a crisis, according to a survey by real estate data firm Clever.

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Online shopping increased in 2022

A large portion of holiday shopping has been done online this year. Online sales grew 10.6% year-over-year, and e-commerce accounted for 21.6% of retail sales, compared to 20.9% in 2021, according to the MasterCard survey.

“The holiday retail season looked different from years past,” Steve Sadoff, Mastercard senior advisor and former CEO and Chairman of the Board of Directors of Saks Incorporated, said in a statement. “Retailers have made significant discounts, but consumers have diversified their holiday spending to accommodate higher prices and appetites for festive experiences and gatherings post-pandemic.”

Of all the shopping categories examined, the MasterCard survey said spending on restaurants saw the largest year-over-year increase.

Spending on restaurants increased by 15.1%. Meanwhile, electronics sales fell 5.3% and jewelry sales fell 5.4%.

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The impact of inflation on shopping habits

Not only was inflation associated with higher holiday spending in 2022, but it also changed some people’s shopping habits.

Online food and beverage sales were expected to grow 22.9% from a year earlier, while healthcare and personal care sales were expected to increase 21%, Insider Intelligence and eMarketer estimates. Apparel and accessories sales are expected to increase by 10.9%.

“Everyday necessities will outperform as traditional holiday categories falter,” Insider Intelligence and eMarketer said in their report. “We expect consumers to shift their budgets toward groceries and household essentials and move away from the discretionary categories.”

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