Dive Brief:
- Consumer spending and store visits slowed in December with the spread of the omicron variant of COVID-19, according to a study from Earnest Research.
- While sales remained above 2020 levels, growth decelerated in the home stretch of the holiday season, according to the research firm. Year-over-year sales growth fell from more than 10% in November to 6% in December.
- Mastercard’s SpendingPulse index also showed holiday spending up year over year in December, growing by 6.9% from 2020 and 8.1% from 2019. Spending between Nov. 1 and Dec. 24 was up 8.5% over 2020, according to Mastercard.
Dive Insight:
The combination of omicron and changing shopping habits rejiggered years of holiday shopping patterns.
As Earnest Research noted, early promotions likely pulled forward some holiday sales into November, during which consumer spending “soared,” with year-over-year growth up 12%, the firm said. That, plus the introduction of the fast-spreading omicron variant, likely led sales growth to decelerate in December.
The share of spending during November topped 50% for the first time since Earnest Research has kept track.
Along with earlier shopping, consumers went to stores less than in the past, which comes as no surprise given the continued impact of the pandemic. Foot traffic tracker Sensormatic Solutions said that U.S. store traffic for the six weeks between the Sunday before Thanksgiving and Jan. 1 was down 19.5% from 2019. That represents an increase from last year, when foot traffic was down 33.1% from pre-pandemic levels.
In that context, e-commerce experienced strong growth. According to Mastercard, e-commerce sales for the traditional holiday period were up 11% from 2020. And that’s on top of last year’s 61.4% growth. Earnest Research found that more than half of apparel and electronics sales took place online.
“Online sales penetration was below 2020 levels for most categories, but significantly higher than 2019, suggesting the new normal is somewhere in between,” the firm said.
A “new normal” for the retail holiday season generally eluded the industry for yet another year, with omicron and supply chain hiccups shaping the season and making the period another without a precedent. What does seem clear by now is that, in spite of inflation, shipping and factory backups, and the continued disruptions from COVID-19, consumers kept shopping at high levels for holiday gifts.
