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The 2022 holiday shopping season is mostly in the books. While final clearance sales and returns remain, Christmas marks the end of the bulk of the spending activity for retail's most important quarter of the year. Now, with a week left until 2023, it’s a time to take stock of this year's results.
Mastercard SpendingPulse delivered first with a day-after-Christmas data drop on Monday. The headline numbers for the period from Nov. 1- Dec. 24 were as follows:
- Overall US retail sales, excluding automotive, grew 7.6% year-over-year.
- Online sales grew 10.6%, while in-store sales grew 6.8%.
- Ecommerce share of overall retail was 21.6%, which was up from 20.9% in 2021 and 20.6% in 2020.
- Black Friday remained the top shopping day of the season, and garnered a 12% increase over last year.
Results were mixed in key categories.
Increases on an annual basis were reported in apparel (4.4%) and department stores (1%).
Yet declines were also observed in top gifting categories, including electronics (-5.3%) and jewelry (-5.4%).
Restaurant spending, which happens alongside holiday shopping, was up 15.1%, highlighting a notable push back toward in-store shopping.
The category trends will add evidence that shoppers were willing to spend on discounted merchandise in more moderately priced categories, but held back on bigger discretionary purchases in an economy where inflation and interest rates are leading consumers to make choices.
While Mastercard’s data is not adjusted for inflation, the numbers did show growth despite the heavy discounting that was observed taking place.
“Inflation altered the way U.S. consumers approached their holiday shopping – from hunting for the best deals to making trade-offs that stretched gift-giving budgets,” said Michelle Meyer, North America chief economist at Mastercard Economics Institute, in a statement. “Consumers and retailers navigated the season well, displaying resilience amid increasing economic pressures.”
Those pressures made the 2022 holiday season a difficult one to forecast. Even early results have been something of a puzzle. These data points, which measure in-store and online retail sales across all forms of payment, will be considered along with other broad measures and retailer earnings reports to determine how this peak season stacked up. With many results still set to come in, the postseason analysis is only just beginning.
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Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”