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Holiday Sales Rise 8.5% Despite Omicron and Supply Chain ‘Issues’

Holiday Sales Rise 8.5% Despite Omicron and Supply Chain ‘Issues’

Holiday sales rose at the fastest pace in 17 years, even as shoppers grappled with higher prices, product shortages, and a raging new COVID-19 variant in the last few weeks of the season, according to one spending measure. Retail sales have continued to rise in an economic environment that has hamstrung some retailers although many have had to sharply increase hourly pay to find and keep workers, increasing their cost of doing business. They also scrambled to fill shelves with major U.S. ports still backed up, although not as badly as some media reports have indicated.

When Omicron hit, some consumers stayed home and shifted their spending to e-commerce, but sales stayed strong, according to data compiled by Mastercard SpendingPulse, which tracks payments including cash and debit cards. The company reported Sunday that holiday sales had risen 8.5% from a year earlier, which is an encouraging number even though Mastercard SpendingPulse had expected an 8.8% increase.

The results, which covered November 1st through December 24th, were fueled by purchases of clothing and jewelry. All told, holiday sales were up 10.7% compared with the pre-pandemic 2019 holiday period. By category, clothing rose 47%, jewelry 32%, electronics 16%. Online sales were up 11% from a year ago and 61% from 2019. Department stores registered a 21% increase over 2020.

The National Retail Federation said in early December that holiday sales were on track to beat its already record-breaking forecasts for an increase of 8.5% to 10.5% compared to the year-ago period. Holiday sales increased 8.2% in 2020 when shoppers, locked down during the early part of the pandemic, splurged on pajamas and home goods, mostly online.

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A broader economic picture will be revealed next month when the National Retail Federation, the nation’s largest retail trade group, comes out with its combined two-month results in mid-January. The results will be based on an analysis of the November and December sales figures from the Commerce Department. Analysts will also be dissecting the fourth-quarter financial results from different retailers that are slated to be released in February.

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