U.S. consumers demonstrated resilience this holiday season, increasing retail spending by 4.2% year over year, according to preliminary data from Visa Consulting and Analytics. Despite economic challenges, shoppers continued to spend, particularly on technology and personal items. The analysis tracked Visa payment data over seven weeks starting November 1, excluding categories like cars and gas.
In-store shopping made up 73% of total holiday spending, while online purchases accounted for 27%, with e-commerce seeing a 7.8% increase from the previous year. Michael Brown, Visa’s chief U.S. economist, noted that consumer confidence is lower than last year, but spending remains strong. A notable trend is the growing use of artificial intelligence in shopping, with nearly half of consumers reportedly using AI for price comparisons and product discovery.
Electronics were the top-performing category, rising 5.8%, driven by demand for high-performance devices. Apparel and accessories also did well, increasing by 5.3%. Conversely, the home improvement sector struggled, with spending on building materials down 1%.
While the headline figures show positive retail growth, they aren’t adjusted for inflation; real growth, taking inflation into account, is estimated at about 2.2%. Many consumers expressed a desire to spend less this holiday season, largely due to rising costs influenced by inflation and tariffs.
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