Welcome back to Cheddar news. Everyone despite challenges like inflation,
labor and product shortages.
And this omicron variant holiday sales seen record levels of growth this year.
That is according to a new report from Mastercard and
its spending pulse platform which does report on national retail sales
across all payment types.
While the company finding holiday sales rose at the fastest pace
in 17 years with shoppers splurging throughout the holiday season.
And a senior adviser for Mastercard and former chair and Ceo of Saks incorporated
steve Sadove joined Cheddar news earlier for more on this holiday shopping search.
The Mastercard spending pulse numbers show that
the consumer is really shopping there healthy.
These are as you said,
8.5% versus year ago and 11% versus pre pandemic
levels says that the savings rate is up there.
The consumer has said is coming back to the stores.
Uh you know, it was during the pandemic. It was
driven largely by the online, but right now you're seeing 8% online,
8% in store growth, 11% online on top of the 50% growth that you had the year before.
So the consumer is back shopping the
categories they didn't shop during the pandemic.
So during the pandemic, it was the home related grocery categories.
Performing well.
Now you're seeing those categories still doing well but on top of it,
apparel coming back growing almost 50%
consumers are tired of being at home.
They're getting out, they want to go to parties, they're going to social events
And they're shopping for newness and that.
And they have the wherewithal because the savings rate is pretty good and at the
high end the stock market is holding up very well so that consumers also shopping.
So these are the best numbers we've seen in 17 years.
You know it's interesting because my next question,
you really kind of touch on this,
they're the holiday shopping surge really comes at a time
when consumers and businesses of course dealing with inflation,
product shortages.
We talk about supply chain issues, the new covid variant,
Why do you believe holiday sales, you know,
weren't significantly impacted by these challenges?
You know, there are a lot of factors to what you're talking about.
So start with the variant.
What we found during the course of the year is the consumer wants to shop safely,
They want to shop however they want to shop in a safe manner,
so sometimes they want to shop in store.
Other times they want to shop online, maybe it's buy online, pick it up, curbside.
What we found when there were hotspots during
the pandemic and it could be the variant,
it could have been in specific cities,
the overall retail sales didn't change that much.
What did change was that where they would shop?
They might move a bit more towards online if they weren't feeling as secure.
So the overall levels are being driven
by the health of the consumer,
Things like the variant may affect where they're shopping but
we have a pattern going on right now where the consumer
is telling us they have that wherewithal they're not shopping
there clearly experiences travel isn't back to pre pandemic levels.
So that's being substituted with stuff
and the stuff that you're seeing is evolving because the consumer, again,
they bought their appliances, they bought improvements in the home.
But the supply chain issues actually turned out to be a benefit for the retailers in
a sense that they consumer heard it loud and clear and what they said was,
hey, you better shop early
if you want to find the key items that you want to get.
So october november december,
each were relatively strong months and the retailers didn't discount
nearly as much as they have in the past.
So what you saw was more full price selling an earlier season,
partly being driven by some of the marketing programs, but also driven by the,
the communications that the retailers did to the consumer that
they better get the stuff while it's still available.
And then you had the shipping company's
delivery delivering because when it was available,
you saw the very, very high ship rates that fulfilling against the consumer needs.
It will be interesting to see when we kind
of get quarterly earnings obviously that being next quarter,
a lot of these retailers to see how how margins held up,
given to your point a moment ago where they
didn't have to discount as much demand was still there
and being met,
want to pivot to products and categories that saw the biggest jumps in sales?
I know you noted apparel just a moment ago, but also,
you know what categories and product lines really saw a decline?
Well you didn't see many decline you, this was a real strong, healthy consumer,
but categories like apparel, jewelry, department stores was a stunning number.
You saw more than 20% growth out of the department
stores and you're seeing it on a two year stack,
about an 11% growth of department stores.
You haven't seen growth like that
in years.
Uh, so we're talking about double digit growth versus pre pandemic levels.
The what says to me is that this is the time and place for the
department stores to show that they've transformed themselves
because they're getting the people into the stores
And they, you know,
not a lot of them have really reimagined what the department store is all about.
And if they can deliver on the experience and uh, you know, the service,
then the customer is going to come back.
It's fascinating to see how brick and mortars, you know,
went up this holiday season along with online sales really continuing to skyrocket
and mastercard found that online sales were up 11% this holiday season.
That's compared to last year. But when you compare it with 2019, it's up what 61%.
We know we've seen that acceleration towards e
commerce and online shopping during this pandemic,
but why is why we still seem that continued kind of massive surge,
especially during this holiday season,
when we were more vaccinated when we could get out and about more,
Everybody wants to get out there.
You know, they're tired of being at home, they want to get back into a store,
they want to see people they want to touch and feel product.
Remember 80, even with the growth of the Internet,
of commerce was still being done on a physical store.
So the store is still critical to retail, but again
it goes back to safety.
The consumers feeling more comfortable, they're vaccinated there, Getting out,
sometimes they want to go back and shop a bit more online.
But overall you're seeing this interaction of the online experience,
you're right, you saw 50% growth in online a year ago.
We probably accelerated three years the rate of
growth of the digitization of the consumer.
But again,
everyone is now comfortable using the online as part of the shopping experience
before I let you go.
I got less than a minute here,
but you noted on something earlier in terms of people shopping earlier,
many outlets mars included really reminded people because supply
chain issues they got to get out and shop.
We actually saw that happen and we've seen
that trend happen even last holiday season.
You know,
we're seeing the timeline getting pushed back towards these holiday sales?
How far back do you think they're gonna eventually go?
And is this a trend that is here to stay?
Oh, I think it's a trend here to stay earlier is better.
You get the consumer get the sales, you're able to, you know, that a year ago,
two years ago, you had the amazon prime day in early october that set the stage.
And I think we're into early october relative to the promotions.
And to your question earlier,
you're going to see great margins out of the retailers.
Now, they have cost increases, they have labor, they have supply chain costs
that they have to overcome.
So that's being offset by some of the
very good selling margins that they're getting.
But overall,
I would anticipate it's going to be a pretty good holiday
season for the retailers as well as for the consumer.
Our thanks to steve Sadaf, senior advisor for Mastercard and former Ceo,
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