A Surge in Holiday Shopping Leads to Increased Spending
Data shows that a sudden surge in shopping leads to an increase in spending.
Dec. 28, 2009— -- Neither rain, nor snow, nor procrastination could hold back shoppers from spending in the final days before Christmas.
According to data from MasterCard Advisors' SpendingPulse, a sudden surge in shopping led to an increase in spending in nearly every category compared with last year as total holiday sales increased 3.6 percent from the start of November to Christmas Eve.
"We had decent holiday season, but we haven't seen a strong recovery yet," said Kamalesh Rao, director of economic research at MasterCard Advisors.
Rao cautioned that comparing sales with a year ago can make the picture look better since holiday sales were abysmal last holiday when retailers slashed prices, consumers curtailed spending, and many worried if another economic depression was imminent. Furthermore, there was an additional day of shopping this year compared to last. Accounting for that difference would result in shopping this holiday increasing only 1 percent over last year.
"There has been a cautious return to spending by consumers," Rao said.
Online sales posted big gains this holiday season. SpendingPulse reported that sales increased 16 percent. "The e-commerce number has been pretty strong all season," said Rao. "One of the key shifts we are seeing in consumer behavior is people are more comfortable shopping online." The Northeastern snowstorm during the final weekend of shopping may have helped online sales as shoppers -- stuck at home -- could still buy over the Web. And while overall sales may have been hurt by the snowstorm, "We had a good four to five days before Christmas which helped to absorb some of the impact from the snow storm," explained Rao.
