Retail Spending Saw 6.2% Growth Over the Holiday Season

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This holiday season was a good one for retailers.  Spending grew 6.2%, the highest in four years according to a study by First Data, a commerce-enabling technology company.

Retail spending was at more than 1.3 million merchant locations in the U.S. Through out the holiday season, retail spending was up 5.4%, an increase from last year’s growth rate of 3.6%.  For online sales, ecommerce accounted for 29% of all transactions, up from 26% in 2016. The holiday season marked the highest share of spend for ecommerce transactions to date.

“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.,” said Glenn Fodor, Senior Vice President, Head of Information and Analytics Solutions at First Data in a press release. “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.”

Electronics, appliances and building materials helped drive the overall seasonal growth, seeing highest growth rates at 8.3% and 6.9%.  The only category with a slight decline was sporting goods, hobby and books, with a modest 0.6% 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% growth in transaction volume suggests 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% increase in spend.  This could be attributed to the hurricane season, where spending patterns indicate that people were rebuilding.  Building materials sales growth was up 31% and furniture sales jumped 22%.

While every single region experience growth in retail spending this holiday season, the Southwest and New England regions grew the fastest, at 5.7% and 5.5%.  The Mid-Atlantic region saw growth of 0.7%.

 

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