Holiday shoppers opened their wallets wider this season, with retail sales climbing 4.2% in the first seven weeks, but inflation, tariffs, and economic uncertainty kept spending targeted and cautious, according to new data from Visa and Mastercard.

By yourNEWS Media Newsroom

NEW YORK — Holiday retail sales grew 4.2% from November 1 to December 21, a slight dip from last year’s 4.8% increase, as consumers balanced gift-giving with economic anxiety, according to Visa’s Consulting & Analytics. When adjusted for inflation, however, growth slowed to just 2.2%—down from 3% in 2023—highlighting how rising prices and Trump-era tariffs are squeezing household budgets.

A Season of Selective Spending

Shoppers are prioritizing gifts over holiday extras, with many skipping decor and non-essentials amid higher costs for groceries, rent, and imported goods. Mastercard SpendingPulse, which tracks cash and credit card spending, reported a 3.9% sales increase—above its 3.6% forecast but still below 2023’s 4.1% growth.

“It’s certainly not a spectacular season,” said Michael Brown, Visa’s U.S. principal economist. “There’s still a lot of uncertainty among consumers about macroeconomic growth and inflation.”

Online vs. In-Store: The Battle for Holiday Dollars

While in-store shopping dominated (73% of sales), e-commerce surged 7.8%, driven by early promotions, according to Visa. Mastercard reported online sales up 7.4%, compared to just 2.9% in physical stores, as shoppers hunted for deals and avoided crowds.

What’s Selling—and What’s Not

  • Electronics led the charge, with AI-powered devices fueling a 5.8% sales jump.
  • Clothing and accessories rose 5.3%, helped by cold weather and discounts.
  • Home decor—heavily tariffed due to Chinese manufacturing—saw only 0.8% growth.
  • Restaurant spending climbed 5.2%, as consumers splurged on experiences despite tighter budgets.

Tariffs and Economic Jitters Weigh on Shoppers

The Trump administration’s tariffs—particularly on Chinese-made goods—played a key role in shaping spending. “Tariffs made holiday decor and home goods more expensive, so shoppers shifted to clothing and tech instead,” Brown explained.

Meanwhile, a weak housing market dragged down home improvement sales, which inched up just 1%.

The Final Stretch: Will ‘Super Saturday’ Save the Season?

With Christmas just days away, retailers are banking on last-minute shoppers. But RetailNext reported a 5.4% drop in foot traffic on Super Saturday (December 21) compared to 2023, suggesting consumers are spreading out trips and sticking to budgets.

The Bottom Line

The National Retail Federation still expects holiday sales to hit $1.01–$1.02 trillion—a 3.7% to 4.2% increase over 2023. But with inflation, tariffs, and a cooling job market, shoppers are spending smarter, not harder.

“Consumers are being strategic,” said Michelle Meyer, Mastercard’s chief economist. “They’re blending online and in-store shopping to find the best deals—and they’re not impulsive.”

As the holiday rush winds down, one thing is clear: This year’s shopping season was less about splurging—and more about survival.

Original article
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