U.S. Holiday Spending Rises 3.8% in 2024, Driven by Online Sales and Value Deals

U.S. consumers demonstrated resilience during the 2024 holiday season, increasing their spending by 3.8% year-over-year from November 1 through December 24, according to Mastercard SpendingPulse. This growth surpassed the 3.1% rise observed in 2023 and exceeded the anticipated 3.2% growth forecasted earlier.

Online shopping played a significant role in this uptick, with e-commerce sales rising by 6.7% compared to the previous year. In-store purchases also experienced growth, albeit at a slower pace of 2.9%. Notably, the final five days leading up to Christmas accounted for 10% of total holiday spending, indicating a surge in last-minute shopping.

The apparel sector saw a 3.6% increase in sales, driven primarily by online purchases. Other categories, including electronics, jewelry, and dining, also reported gains, reflecting consumers' willingness to spend across various sectors despite economic challenges.

Retailers faced a condensed shopping period this year, with five fewer days between Thanksgiving and Christmas compared to 2023. Additionally, the holiday season coincided with a presidential election, potentially diverting consumer attention. Despite these challenges, the robust spending figures suggest that consumers were motivated by value, responding positively to promotions during key shopping periods such as Black Friday and the days leading up to Christmas.

Michelle Meyer, Chief Economist at the Mastercard Economics Institute, noted, "The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value." This sentiment underscores the importance of strategic promotions and value offerings in driving consumer spending.

The National Retail Federation (NRF) had projected a 2.5% to 3.5% increase in sales for November and December, indicating a more conservative outlook compared to the actual performance reported by Mastercard SpendingPulse. The NRF is expected to release its comprehensive sales data next month, which will provide further insights into consumer behavior during the holiday season.

The shift towards online shopping continues to be a significant trend, with consumers increasingly favoring digital-first shopping experiences, including e-commerce, curbside pickup, and delivery services. This transition has been accelerated by the COVID-19 pandemic and appears to have sustained momentum into the 2024 holiday season.

Retailers that have invested in robust online platforms and seamless omnichannel experiences were well-positioned to capitalize on this trend. The apparel sector's strong online sales growth highlights the effectiveness of digital strategies in engaging consumers and driving sales.

Despite the positive sales figures, retailers continue to navigate a complex economic landscape characterized by inflationary pressures and shifting consumer preferences. The emphasis on value-driven spending suggests that consumers are becoming more discerning, seeking quality and affordability in their purchases. Retailers that can effectively balance these demands are likely to maintain a competitive edge in the evolving market.

Looking ahead, the sustained growth in both online and in-store sales during the holiday season indicates a resilient consumer base. However, retailers must remain adaptable, leveraging data-driven insights to anticipate and respond to changing consumer behaviors. The integration of technology, personalized marketing, and value-oriented offerings will be crucial in sustaining growth and meeting consumer expectations in future shopping seasons.