Wednesday , June 19, 2024

Numbers From Mastercard And Visa Indicate Growing Momentum for Consumer Spending

It’s more than 100 days until Christmas, but forecasts for the 2021 holiday shopping season are already rolling in. Mastercard Inc., in its SpendingPulse report released Monday, forecasts that U.S. holiday retail spending from Nov. 1 to Dec. 24 will increase 7.4% over 2020 and 11.1% over the same period in 2019.

In an acknowledgement that many consumers start their holiday shopping earlier, Mastercard forecasts that retail sales during the Oct. 11-Dec. 24 period, what the card brand labels the “75 Days of Christmas,” will increase 6.8% over 2020 and grow 11% from 2019.

E-commerce sales, already buoyed by exponential growth last year, will continue to grow. Mastercard says e-commerce sales will be up 7.6% from last year and a whopping 57.3% from 2019 for the Nov. 1-Dec. 24 period. Similarly, the increases are predicted to be 7.5% and 59.3% for the extended shopping period. “While we anticipate that the return to in-store browsing and shopping will continue, e-commerce retail sales are not going anywhere,” the report says.

In a new poll, 62% of consumers says they plan to make their holiday purchases online. That’s down from 71% in 2020, but up from 51% in 2019. The survey of 2,410 adults also found that 42% plan to buy most of their gifts with a debit card. Thirty-eight percent say they will use a credit card, followed by cash, 15%, and buy now, pay later services, 5%.

Though holiday shopping has yet to begin in earnest, consumers are still spending more at retailers than they did at this time last year. Visa Inc., in its U.S. Spending Momentum Index, also released Monday, registered a value of 109.6 for August. A reading above 100 indicates consumers are spending more than they did a year ago. 

The August value is down 2.9 points from July, but Visa says the recovery continues. “Based on a strong first half and our forecast for economic growth to reaccelerate after a brief pause during the third quarter, U.S. consumer spending for the full year of 2021 should still expand at its fastest pace in decades,” Wayne Best, Visa chief economist, says in a statement.

Visa says the index is not an indicator of its own performance either financially or operationally as a payments network. Instead, it is calculated on the basis of sample data derived from its VisaNet operation. The scoring of the data results in an index value between zero and 200. 

Check Also

No Slowdown in Online Grocery’s Post-Pandemic Surge

Online grocery sales, which surged during the Covid pandemic as consumers avoided in-store shopping, continue …

Digital Transactions