There may be big holiday sales growth compared to pre-pandemic

However, Mastercard's latest insights suggest electronics could struggle.

Christmas-holiday-shopping

Despite inflationary pressures, anticipated holiday retail sales overall will be 5.7% higher than last year, and 21.2% compared to pre-pandemic levels.

That’s according to Mastercard’s latest SpendingPulse report, which measures in-store and online retail sales across all forms of payment, and for its October report also used that data to make forecasts about the Nov. 25 to Dec. 24 sales period.

Apparel sales growth over this period will match that of last year at 6.9%. While jewelry is expected to be down 4.5% year-over-year, it will be up 7.9% compared to 2019. Electronics, however, are not faring as well, with an anticipated 4.2% year-over-year dip and a 3.1% slump compared to pre-pandemic.

This year, moderate sales growth is expected on Black Friday (2% year over year) and Boxing Day (7.5% year over year) as these traditional single-day sales have become extended events. 

While electronics were a popular purchase item for consumers during these sales events, electronic sales are projected to be down 12.5% year-over-year on Black Friday (down 54.3% from 2019 levels) and 8.2% year-over-year on Boxing Day (down 54.8% from 2019 levels) this year as consumer behaviour shifts.

“While there are lots of pre-Black Friday sales and promotions happening to draw customers in early, we’re expecting a return of last-minute gift buying this holiday season,” said Steve Sadove, senior advisor for Mastercard. A major boost for this season’s retail growth is expected from in-store shopping as customers have more flexibility to shop in-store again.

“Easing supply chain issues coupled with a return to in-store shopping, has reduced the need for consumers to do their online holiday shopping well in advance,” Sadove says. 

According to Mastercard, the days leading up to Christmas are slated to be among the busiest days for retailers: total retail sales are projected to be up 24% year-over-year on Dec. 23 and 17.5% on Christmas Eve.

The most popular categories for last minute buyers will be jewelry and leather goods, with Mastercard projecting 25.4% year over year growth. Apparel, Mastercard says, is also likely to be a go-to gift for shoppers in the last days before Christmas. This is also one area of reprieve for electronics, which Mastercard projects will have a sales boost of 10.7% on Dec. 23 and 5.2% on Christmas Eve.

Finally, e-commerce retail sales are expected to grow a modest 3.8% from 2021 levels, but are up a whopping 63.1% from 2019.