Holiday Retail Sales Exceeded Expectations in 2022 — How Inflation Influenced Shopping Behavior

Closeup of woman holding shopping bags on the street with copy space.
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Although sales rose at a slower pace than the 8.5% increase in December 2021, U.S. holiday retail spending outpaced expectations and remained strong in the face of stubbornly high inflation this year.

According to Mastercard SpendingPulse, American retail sales rose 7.6% year-over-year (YOY) this holiday season from Nov. 1 to Dec. 24. — SpendingPulse had anticipated just a 7.1% increase.

The data indicated apparel/clothing category saw a significant rise of 4.4%, department stores a moderate increase of 1.0% and restaurants a whopping boost of 15.1% YOY, as people continued to enjoy time eating out with co-workers, friends and family during the holidays. Jewelry (-5.4%) and electronics (-5.3%) plunged from 2021 to 2022. Meanwhile, automotive sales are not included in the holiday sales data.

Additionally, online spending grew 10.6% while in-store purchasing increased 6.8%. E-commerce comprised 21.6% of all retail sales, according to the data. This is up from 20.9% in 2021 and 20.6% in 2020.

In a Mastercard press statement, senior advisor for Mastercard Steve Sadove said that spending was healthy, but that consumers approached the holiday season with a changed outlook this year.

“This holiday retail season looked different than years past,” said Sadove. “Retailers discounted heavily, but consumers diversified their holiday spending to accommodate rising prices and an appetite for experiences and festive gatherings post-pandemic.”

As AP reported, inflation has decreased slowly over the past six months, yet consumer prices remain high. As a result, many more Americans shopped with purpose during the 2022 holiday period, by spending less on discretionary purchases and more on necessities, frequenting discount stores and big box chains and waiting for late-breaking deals at their favorite retailers.

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Michelle Meyer, North America Chief Economist at the Mastercard Economics Institute, stated that, “Consumers and retailers navigated the season well, displaying resilience amid increasing economic pressures.” However, Meyer agreed that Americans have become deliberately shrewd shoppers during the 2022 holiday season.

“Inflation altered the way U.S. consumers approached their holiday shopping — from hunting for the best deals to making trade-offs that stretched gift-giving budgets,” said Meyer.

Per Mastercard, SpendingPulse assesses in-store and online U.S. retail sales, or “sales at retailers and food services merchants of all sizes,” across all forms of payment and is not adjusted for inflation.

While it is a reliable indicator of consumer spending trends, AP stated next month’s National Retail Federation (NRF) report — combining November-December Commerce Department sales figures — should give a better understanding of how Americans spent their money this holiday season.

Back at the beginning of November, the NRF announced expected holiday retail growth of between 6%-8% during November and December YOY, totaling between $942.6 and $960.4 billion, and predicted that American consumers would remain resilient even during this frustrating stretch of high inflation and prices.

“Despite record levels of inflation, rising interest rates and low levels of confidence, consumers have been steadfast in their spending and remain in the driver’s seat,” said NRF Chief Economist Jack Kleinhenz at the time.

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