There was plenty of good cheer at America’s shopping malls this holiday season as consumers unleashed their wallets and set spending records, buoying retailers and raising confidence levels for more economic gains in 2018.
President Trump celebrated Thursday the results of the 2017 holiday shopping season to date after initial financial reports showed strong increases in spending, in some cases blowing through projections after a late-season rally.
“Retail sales are at record numbers,” tweeted Mr. Trump. “We’ve got the economy going better than anyone ever dreamt—and you haven’t seen anything yet!”
Retail sales are at record numbers. We’ve got the economy going better than anyone ever dreamt - and you haven’t seen anything yet!
— Donald J. Trump (@realDonaldTrump) December 28, 2017
Mastercard SpendingPulse reported Tuesday that holiday sales from Nov. 1-Dec. 24 rose this year by 4.9 percent, marking the largest year-to-year increase since 2011 and setting a record for dollars spent, while online retail outlets saw an 18.1 percent jump over 2016.
“Overall, this year was a big win for retail,” said Sarah Quinlan, senior vice president of Market Insights, Mastercard, in a statement. “The strong U.S. economy was a contributing factor, but we also have to recognize that retailers who tried new strategies to engage holiday shoppers were the beneficiaries of this sales increase.”
The report echoed the results of a FirstData Corp. analysis released Dec. 22 that found retail spending surged by 6.6 percent from Oct. 28-Dec. 18 over the same period in 2016, while overall spending was up by 9.2 percent on non-gasoline purchases.
The National Retail Federation had reason for optimism after forecasting that holiday sales would show a year-to-year increase of 3.6 to 4 percent in November and December—and then November sales jumped by 6 percent.
“Right there showed it was going to be a really strong holiday already,” said Ana Serafin-Smith, NRF senior director of media relations. “So with November being pretty strong, and with reports we’re hearing from our own members, we’re either expecting to meet the 4 percent or exceed it.”
The jolly holiday sales have been attributed to a number of factors, including low unemployment, increased wages since the Great Recession, relatively mild weather in many areas, and consumer confidence, which has been at an all-time high for the last six months.
“All the stars have aligned for the consumer to be in a really strong position to spend more than normal, and maybe even get themselves in a little bit of debt that allows them the additional spending that we’re seeing,” said Ms. Serafin-Smith.
Mastercard reported that electronics and appliance sales increased by 7.5 percent, the biggest jump in 10 years, while home improvement and furnishings purchases grew by 5.1 percent from the same period in 2016.
Shoppers also finished strong, with Dec. 23 coming in second in terms of sales only to Black Friday, the day after Thanksgiving and traditional start of the holiday-shopping season.
Jewelry sales increased by 5.9 percent, and even department stores and specialty apparel shops saw moderate gains, which was “particularly impressive given recent store closings,” according to Mastercard.
Among the top retail performers was online giant Amazon, which recorded its “biggest holiday season” ever as shoppers ordered more than one billion items, including 10 million Alexa-enabled devices, marking a “record holiday shopping season for Amazon Devices.”
“Thank you to the millions of customers and hundreds of thousands of Amazon employees all around the world who made this holiday better than ever before,” said Jeff Wilke, Amazon’s CEO Worldwide Consumer, in a statement. “We look forward to another great year ahead.”
Retailers have reason for confidence in 2018: The Republican tax-reform bill, which lowers the corporate tax rate from 35 to 21 percent in 2018 and goes into effect Jan. 1.
“Based on the results of the holiday season and what we’ve seen throughout the entire year, we’re expecting it’s going to be a pretty strong 2018 as well,” said Ms. Serafin-Smith. “And with ending the year with tax reform, the retail industry is really happy right now.”
The cut in the corporate tax rate will allow retailers “to invest in their stores, to invest in their own employees, and we can’t forget, to invest in all things warehouse, distribution and their websites,” she said.
Storefront sellers have struggled for years with the rise of online shopping services like Amazon, compounded by a corporate tax rate that has “really dragged down” the retail sector, she said.
“Even Mom-and-Pop shops were paying that percentage,” she said. “And that eventually trickled down to prices in their stores, which affects the consumer as well. So having this tax break for the retailers right now, we’re more than likely going to see a break in prices for consumers. So that’s going to allow the consumer to spend a little bit more.”
A Gallup Poll released Oct. 26 offered a harbinger of this year’s strong holiday sales: Consumers said they planned to spend an average of $906 on gifts, up from $785 the previous year, the most since 2007.
That jump represented one of the largest year-to-year increases in polling history.
• This article was based in part on wire-service reports.
• Valerie Richardson can be reached at vrichardson@washingtontimes.com.
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