U.S. retail sales, excluding automotive, are expected to increase 3.7 percent year-over-year (YOY) this holiday season, according to Mastercard SpendingPulse. Mastercard SpendingPulse said the forecasted growth in U.S. retail for the period November 1 through December 24 reinforces continued consumer resilience.

Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment and is not adjusted for inflation.

By channel, sales are expected to rise 6.7 percent online and 2.9 in-store. By category, the biggest gain is expected to come in electronics, +6 percent; followed by restaurants, +5.4 percent; grocery, +3.9 percent; and apparel, +1.0 percent. The jewelry category is expected to see a 0.3 percent decline.

Mastercard SpendingPulse said in a statement that looking back at the 2022 holiday shopping season, inflationary pricing and pent-up demand, coupled with excess savings and rising wages allowed consumers and retailers to navigate the season well. After years of inventory and spending habits being in flux, the 2023 season should bring a broader rebalancing across categories, channels and sectors in alignment with macroeconomic trends.

“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 for the holiday period 2023 include:

  • While digital shopping habits became the new normal during the pandemic, today’s consumer is looking to make purchases anytime, anywhere, both in-store and online. With this omnichannel approach, consumers are anticipated to shop across channels, with e-commerce expected to increase +6.7 percent and in-store sales to increase 2.9 percent YOY.
  • 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 percent YOY this season.
  • The Restaurant sector is expected to continue its growth streak, increasing 5.4 percent YOY and outpacing Grocery growth (+3.9 percent), 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 Inc. “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.”