Stock Groups

Holiday sales jumped 8.5%, as shoppers shrugged off higher prices


Shoppers are rushing in to purchase gift cards or making returns, and retailers seem to be celebrating: According to Mastercard SpendingPulse, holiday spending increased 8.5%.

Although the gain was less than Mastercard’s 8.8% prediction, it was still the largest annual increase in 17 years. It is still possible that the strong holiday season will make January and February more difficult.

On CNBC’s “Consumer Demand” program, Oliver Chen (a Cowen retail analyst) stated that “Consumer demand is very strong but we are cautiously optimistic because traffic has decelerated slightly in December.”Squawk on the Street.”

Chen stated that he has not given up on his expectations of the industry’s performance for this holiday season or beyond. The omicron version and inflation weigh heavily on the minds of consumers. He said that supply chain problems can also impact profits if consumers’ appetites decrease or the goods don’t arrive on time. This could force retailers to reduce their markdowns.

The peak shopping season is just beginning to be understood by investors and retail stores. Mastercard data provides one glimpse at this season. This company monitors in-store retail sales and online sales between Nov. 1 and Dec. 24, across all payment methods, except automotive.

According to Mastercard, total retail sales increased 10.7% in this holiday, compared to the same period last year. This is a significant increase from pre-pandemic levels. The study found that online sales were up 61.4%, while in-store sales went up 2.4%.

Online shopping is now a much more important part of holiday shoppers’ lives since the pandemic. Mastercard reports that e-commerce sales rose 11% from 2020-2021. According to Mastercard, online retail sales represented nearly 21% total retail spending in the holiday season. This is approximately in line with last year’s period but up from 14.6% in 2019.

Some categories of retail were particularly successful. Apparel and jewelry sales increased by 32% and 47.3%, respectively, over the same period last year. They rose 29% and 26,2% respectively, when they were compared to the holiday period in 2019. Comparatively to the previous year, electronics sales increased 16.2%.

Chen mentioned that there are some retailers who include Walmart, CostcoAnd TargetThey are better placed because they cover multiple merchandise categories, and offer online options such as curbside pick-up and home delivery. This is because people want convenient and secure ways to shop. Walmart shares and Target were trading at a lower than 1% Monday while Costco shares rose more than 2 percent.

Jeweler and luxury retailers Brilliant EarthA high-end retailer of home décor RHAccording to him, the company has seen a decrease in price-sensitive customers who spend more money on handbags and earrings. Both shares of Brilliant Earth and RH traded slightly lower Monday.

Chen has been added Macy’sAnd Kohl’sBecause the shares are underperforming, these stocks can be attractive. Macy’s stock rose more than 3 percent Monday while Kohl’s gained almost 2%. Macy’s has seen a 131% increase in year-to date, despite a challenging year in 2020 for stocks of department stores. Kohl’s gained over 25% since 2021.