Consumer spending is up: Are Americans enjoying a post-recession holiday?
Consumer spending this holiday season is higher in all retail categories. Debt is down, disposable income is up, and analysts say recession-weary shoppers are 'tired of being afraid.'
Consumers may be in a post-recession spending mood this Christmas season.Skip to next paragraph
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Spending is up in all retail categories compared with last year, according to MasterCard Advisors’ SpendingPulse, which tracks spending on all transactions including cash. Analysts say the increase in personal savings and a decline in consumer debt are giving consumers more confidence than they had in recent years to spend on others and even themselves.
“There is tremendous pent-up demand as consumers are tired of being afraid. So they’re seeing a little sunlight and a few more bucks in their pockets,” says Robin Lewis, an independent retail consultant based in New York City. “They’re willing to go out there and find a little treat for themselves.”
IN PICTURES: Holiday helpers
SpendingPulse tracked retail sales beginning Oct. 31 and continuing though Dec. 11. Online sales showed the greatest increase, 13 percent, from the same period last year. Another sign of success of online shopping: Compared with the previous year, online sales increased 18.3 percent on Cyber Monday, the first business day following Thanksgiving, and 17.2 percent that entire week.
Although online buying has not surpassed brick-and-mortar retail, the double-digit increases this season shows “consumers are getting more comfortable and confident with [online shopping], and [online retailers] are designing strategies to pull more people in,” says Mike Berry, director of industry research for SpendingPulse in St. Louis.
Incentives and free shippping
Helping to drive up online sales were early incentives, some offered before Thanksgiving, and free shipping. Retail operators like GroupOn.com, which allows consumers to collectively purchase goods or services at low rates, are examples of how shoppers turned to their computers to save money.
Apparel shopping increased 9.6 percent this season, with the increase in women’s apparel lagging behind men’s apparel sales, 4.4 percent to 8.4 percent. Jewelry revenue rose 2.6 percent and furniture rose 3.4 percent.
One reason apparel buying is up is because consumers had been holding onto their clothes for several years during the recession and now felt an impulse to refresh their wardrobe, says Mr. Berry. “Sales had been suffering for so long. Eventually you do have to buy new clothes. Kids wear out what they’ve got, or people are tired of what’s in their closet,” he says.