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Clothing Sales Jump 7.9 Percent This Holiday

Based on early data from Mastercard, retailers made Santa’s “nice” list this holiday and enjoyed a very merry Christmas with consumer spending up 5.1 percent to $850 billion between Nov. 1 and Dec. 24.

It’s the best growth seen in the past six years, the company said, and ahead of the 5 percent projection predicted by IHS Markit.

Apparel is a perennial holiday gifting favorite and this season consumers responded to what clothing sellers had on offer, boosting category sales 7.9 percent over the same period in 2017—and the strongest growth rate recorded in the past eight years, according to the Mastercard SpendingPulse, which tracks non-automobile transactions across channels and all payment types. Shoppers’ enthusiasm for new clothing started during the back-to-school season and strengthened into autumn, the company added.

“By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels,” noted Steve Sadove, a Mastercard senior advisor and the former Saks Incorporated chairman and CEO.

Results at department stores, once the destination du jour for year-end shopping, were decidedly mixed. Their 1.3 percent year-on-year decline comes on the heels of two consecutive years of sub-2 percent growth. Some of that turmoil can be linked to the rash of store closings many have labeled as a “retail apocalypse” but consumers have also shown a preference for shopping smaller format stores rather than sprawling mall anchors.

However, department stores’ digital investments show signs of paying off; e-commerce sales for these retailers grew 10.2 percent, part of the overall 19.1 percent lift among all online retail sales compared to 2017.

Mastercard noted that retailers may have been hampered by less-than-ideal weather during the holiday shopping season that brought frigid temperatures to the East Coast on Black Friday and drenched both coasts the weekend of Dec. 15-16. That’s on top of a stormy final Friday before Christmas, all of which begs the question: if not for inclement weather, could retailers have made it to $1 trillion?