Mastercard Forecasts Holiday Season Sales Growth

Consumer spending for the upcoming holiday season is expected to grow 3.7%, according to a new forecast from Mastercard Spending Pulse.

Officials with Mastercard said the anticipated growth covering a period from Nov. 1 through Dec. 24, which excludes automotive, is indicative of continued consumer resilience. The feeling from Mastercard is the 2023 holiday season will bring a broader rebalancing across categories, channels, and sectors in alignment with macroeconomic trends.

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“While the consumer of holidays past may have been a consumer trying to find footing in a rapidly shifting economy, the consumer of holidays present has taken their power back,” said Michelle Meyer, U.S. chief economist, Mastercard Economics Institute. “We expect these individuals to impressively navigate the holiday season, making choices and trade-offs that best suit their lifestyles.”

Key trends to watch in 2023 include:

• Spreading Cheer Across Channels: While digital shopping habits became the new normal during the pandemic, this season’s shopper is looking to make purchases anytime, anywhere – in-store and online. With this omnichannel approach in mind, consumers are anticipated to shop across channels, with e-commerce expected to increase +6.7%, and in-store sales to increase +2.9% YOY.
• Tech the Halls: Electronics, gadgets and gaming might be at the top of many wish lists this year as AI, immersive experiences and digital workspaces continue to evolve the way we work and play. Further, consumers who purchased new gadgets during the pandemic could be looking to upgrade to the latest model. Electronics are anticipated to increase +6.0% YOY this season.
• Festive Feasting: The Restaurant sector is expected to continue its growth streak, increasing +5.4% YOY and outpacing Grocery growth (+3.9%), as consumers make plans to gather around tables and with loved ones for shared meals, activities, and festivities outside of the home.

“This holiday season, retailers will be vying for consumer dollars. With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value-focused,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “We expect the most effective holiday strategy will be to meet consumers where they are – personalized promotions to in-store experiences will be key in doing so.”

Mastercard Spending Pulse breakdown of its holiday sales forecast includes:

Total: +3.7%

E-commerce: +6.7%

In-Store: +2.9%

Apparel: +1.0

Electronics: +6.0%

Grocery: +3.9%

Jewelry: -0.3%

Restaurants: +5.4%