The best holiday season in years

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The best holiday season in years

By Gina Acosta - 01/10/2018

Retailers enjoyed their strongest holiday season in four years, according to First Data’s SpendTrend Report.

Overall sales growth for the full holiday season was 6.2% year-over-year, accelerating from last year’s 4.7%. Retail spending grew 5.4% compared to 3.6% last year. And e-commerce represented 29% of total transactions, up from 26% in 2016.

Additionally, this 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. “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 Stand Out

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% and 6.9%, respectively. The only category with a slight decline was the sporting goods, hobby and books segment, with a modest 0.6% decline.

Consumers Buying More Online but for Smaller Ticket Items

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 that more people are using online channels to purchase less expensive, everyday items than in prior years.

Southwest Flourishes as Houston Rebounds

Among the 10 largest U.S. cities, Houston ranked number one in terms of overall growth, with a 10.9% increase in spend. Following the devastating hurricane season, spending patterns indicate that people in the area are rebuilding. Building materials sales growth was up 31% and furniture sales jumped 22%.

While every single region experienced growth in retail spending this holiday season, the Southwest and New England regions grew the fastest, at 5.7% and 5.5%, respectively. At the other end of the scale was the Mid-Atlantic region, which posted growth of 0.7%.

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 e-commerce transactions.