Economy Watch: Holiday Sales Rise, Especially Online

More than one-fifth of all holiday spending this season was conducted online, a substantial increase from the same time a year before.
Courtesy Flickr Creative Commons user slowburn

Courtesy Flickr Creative Commons user slowburn

According to First Data, which released its 2016 holiday report on Monday, overall U.S. consumer spending increased 4.7 percent during the recent holiday period (roughly November and December) compared with a year earlier. The spending increases included both physical retail stores and Internet sites, but e-commerce growth was a lot more robust.

That’s because Americans continued to ramp up their holiday purchases online, with e-commerce transactions up 12 percent for the year. In fact, more than one-fifth (21.3 percent) of all holiday spending was conducted online, a substantial increase from 15.4 percent last season. Brick-and-mortar stores eked out sales growth of 1.6 percent year-over-year.

Even with the benefit of online sales, certain retail categories had lackluster growth or worse during the holidays, First Data reported. Department stores, as well as clothing and accessories retailers, took a hit. Department store sales were down 4.8 percent overall, while clothing and accessories saw meager growth of 0.1 percent. Women’s clothing retailers saw a decline of 3.7 percent in year-over-year growth.

Electronics and appliances stores, on the other hand, enjoyed significant growth this year, up 8.5 percent overall, according to the report. That reverses recent trends for that sector, which suffered a contraction in sales between the 2014 holiday season and 2015, down 2.2 percent.

First Data doesn’t cover the full gamut of retail spending, but it does track a large chunk of it, including card-based forms of payment. Nearly one million merchant locations across the United States were included in the company’s analysis, covering stores open for business from Oct. 29, 2016, through Jan. 2, 2017, which have been serviced by First Data for at least 13 months. These locations include everything from mom-and-pop shops to large retailers, both brick-and-mortar and online.