The 2024 holiday season proved fruitful for U.S. retailers, with total retail sales (excluding automotive) increasing 3.8% year-over-year, according to Mastercard SpendingPulse. 

The report, which analyzes in-store and online retail sales across all payment methods, highlights shifting consumer behavior and robust economic factors driving holiday spending from November 1 through December 24.

Here are the key takeaways.

Regional trends and e-commerce leadership

The growth of e-commerce continued to dominate the retail landscape, with online sales up 6.7% year-over-year, significantly outpacing the 2.9% increase in in-store sales. Certain cities emerged as leaders in e-commerce: Tampa, Florida, and Phoenix saw double-digit growth of 10.6% and 10%, respectively. Other metropolitan areas, such as Minneapolis (8.9%), Dallas (8.4%), and Charlotte, North Carolina (7.9%), also showcased a strong preference for online shopping.

“The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods,” said Michelle Meyer, chief economist at the Mastercard Economics Institute.

Sector-specific insights

While e-commerce growth remained robust, spending in traditional retail categories revealed a mix of preferences:

• Dining Out: Restaurant dining gained traction, with sales increasing by 6.3% over the prior year, driven by consumers prioritizing social activities during the holidays.
• Apparel and Jewelry: Both apparel (up 3.6%) and jewelry (up 4%) saw steady growth, highlighting their continued appeal as go-to gift options.
• Electronics: A 3.7% increase in electronics spending suggests sustained consumer interest in tech-related gifts, particularly through online channels.

Consumer behavior and strategic retail responses

Shoppers displayed a keen focus on value, with promotional periods such as Black Friday and Cyber Monday driving significant sales. The last five days of the holiday season alone accounted for 10% of total retail spending. Retailers responded with dynamic strategies, offering deals that catered to both digital-first consumers and traditional shoppers.

“This holiday season, we saw consumers motivated by deals and retailers respond with promotions to meet the demand,” said Steve Sadove, senior advisor for Mastercard and former Saks CEO. “The value-minded consumer showed up to shop at brick-and-mortar stores and e-commerce platforms, with retailers managing across both to capture attention throughout the season.” 

Broader economic indicators

Solid consumer spending during the holidays reflected broader economic trends such as a strong labor market and gains in household wealth. These factors supported robust activity across multiple retail categories, reinforcing the resilience of the U.S. economy during the season.

Looking ahead

As consumer behavior continues to evolve, retailers face the challenge of balancing physical and digital experiences while catering to diverse spending priorities. The 2024 holiday season serves as a testament to the importance of strategic agility in meeting the needs of value-driven and experience-focused shoppers alike.