Calling it the “perfect storm,” retail analysts now tell us that the 2017 holiday shopping season grew at the highest rate in four years time…with spending climbing by 6.2-percent in the all-critical time frame from October 28th through January 1st. The numbers come from First Data, a global leader in commerce-enabling technology.
The analysts say, “Given the favorable consumer backdrop, spending grew by 6.2-percent this holiday season for the highest spike in four years.” First Data analyzed consumer spending at more than 1.3 million merchant locations in the U.S, and reports that throughout the holiday season, retail spending was up 5.4-percent, a solid increase from last year’s growth rate of 3.6-percent. For online sales, eCommerce accounted for 29-percent of all transactions, up from 26-percent a year earlier in 2016. Additionally, this holiday season marked the highest share of spend for eCommerce transactions to date.
Glenn Fodor is Senior Vice President and Head of Information & Analytics Solutions at First Data. He says, “A variety of factors created a ‘perfect storm’ for consumer spending this season, from low unemployment and high consumer confidence, to the soaring stock market and even good weather conditions for most of the U.S.” He adds, “Consumers were out in full force during the entire season, leading to impressive growth rates. Additionally, while eCommerce continues to grow rapidly, brick-and-mortar still remains a vital part of the holiday season.”
The robust sales scene might bode well for Whirlpool Corporation, too, since First Data says that while the majority of retail categories experienced solid growth this season, electronics and appliances, and building materials helped drive the overall seasonal growth, seeing the highest growth rates at 8.3-percent and 6.9-percent, respectively. The only category with a slight decline was the sporting goods, hobby and books segment, with a modest 0.6-percent decline.
The average ticket size for retail brick-and-mortar was $68.57, compared to $103.49 for eCommerce. The dip in the average eCommerce ticket size, which was $105.73 in 2016, along with nearly 13-percent growth in transaction volume suggests that more people are using online channels to purchase less expensive, everyday items than in prior years.
Among the 10 largest U.S. cities, Houston ranked number one in terms of overall growth, with a 10.9-percent increase in spending. Following the devastating hurricane season, spending patterns indicate that people in the area are rebuilding. Building materials sales growth there was up 31-percent and furniture sales jumped 22-percent.
While every single region experienced growth in retail spending this holiday season, the Southwest and New England regions grew the fastest, at 5.7-percent and 5.5-percent, respectively. At the other end of the scale was the Mid-Atlantic region, which posted growth of 0.7-percent.
For more information on the First Data Holiday 2017 SpendTrend report, including average ticket size, spending across various retail categories, and a deeper regional analysis, you can click the link below. The link also features industry-specific infographics from the SpendTrend Holiday Countdown.
All data referenced in the report is First Data’s aggregated merchant processing data and includes only card-based forms of payment. The analysis includes more than 1.3 million U.S. merchant locations that were open for business between October 28, 2017 and January 1, 2018, and have been serviced by First Data for at least 13 months. These locations include everything from “mom-and-pop” type shops to large retailers, and the report covers both brick-and-mortar and eCommerce transactions.
First Data’s SpendTrend report, a macro-economic indicator, is based on aggregate same-store sales activity across First Data’s network. Same-store sales methodology focuses on consumer spending activity and economic growth. First Data’s SpendTrend report does not indicate nor represent First Data’s financial performance.
First Data is a global leader in commerce-enabling technology, serving approximately six million business locations and 4,000 financial institutions in more than 100 countries around the world. The company’s 24,000 owner-associates are dedicated to helping companies, from start-ups to the world’s largest corporations, conduct commerce every day by securing and processing more than 2,800 transactions per second and $2.2 trillion per year.