Survey: Online shopping, lower gas prices helped holiday retail sales

Lower gas prices and online shopping helped generate a 7.9 percent boost

December 29, 2015 at 2:29AM
Shoppers carry bags as they cross a pedestrian walkway near Macy's in Herald Square, Friday, Nov. 27, 2015, in New York. The early numbers aren't available yet on how many shoppers headed out to stores on Thanksgiving, instead of waiting until today. But it's expected that more than three times the number who shopped yesterday will be out bargain-hunting today.
Shoppers carry bags as they cross a pedestrian walkway near Macy's in Herald Square, Friday, Nov. 27, 2015, in New York. The early numbers aren't available yet on how many shoppers headed out to stores on Thanksgiving, instead of waiting until today. But it's expected that more than three times the number who shopped yesterday will be out bargain-hunting today. (The Minnesota Star Tribune)

Lower gas prices and the ease of online shopping may be giving retailers an extra spark this holiday season.

After years of recessionary belt tightening, consumers spent 7.9 percent more than last year during the dash between Black Friday and Christmas Eve and ponied up for furniture and other high-priced items, according to MasterCard SpendingPulse.

The report, released Monday, doesn't include sales of cars or gas and is based on an analysis of actual spending data as well as surveys of consumers using credit cards, cash and checks.

Minneapolis-based Target reported several "record-breaking days" on Target.com, said spokeswoman Megan Boyd. Although the company couldn't offer specific sales data, toys remained a perennial favorite and consumers showed "great interest" in the Apple Watch, iPads and gaming consoles both in stores and online.

Independent retailer Patina has been exceeding sales goals this season as well, with day-after Christmas shoppers looking for discounts on hipster holiday items as well as full-priced merchandise, said Uptown manager Kim Cook.

A spokesman for Richfield-based Best Buy said the company wouldn't comment on holiday sales until it releases results in mid-January.

Most analysts have pointed to a ho-hum holiday for retailers, in a critical selling period that can account for as much as one-third of annual revenue.

The SpendingPulse report aligns with several others showing that more consumers are letting their fingers do the shopping. Although online sales still represent a small slice of the pie, sales from computers and smartphones increased 20 percent compared to last year, according to SpendingPulse, a boost that might be enough to save Christmas for some retailers.

The rise of e-commerce "is a solid indication of an empowered and savvy shopper," said Sarah Quinlan, MasterCard Advisors' senior vice president of market insights, in a statement. "The double-digit growth in furniture sales, for instance, shows that consumers are willing and able to splurge on big ticket items."

HOM Furniture is seeing its strongest year since the recession, said President and CEO Rod Johansen, with a November that was "top tier."

Sales during the holiday season typically are strong in November and slack off toward Christmas, he said. But combined sales at its HOM, Gabberts and Dock 86 stores are expected to rise in the low double-digits in the weeks since Black Friday, lining up with the SpendingPulse data.

"Customers are planning further in advance for our purchases," Johansen said. While shoppers aren't talking specifically about the impact of low fuel prices on their household finances, "you can surmise that" it has made a difference, he said.

"It could also be the combination with warmer weather, which has been beneficial," Johansen added. "It's costing other places revenue, but it might be coming to us."

Looking more broadly at consumer spending in November and December, the SpendingPulse report found shoppers spent about 4.6 percent more compared with last year.

Analysts said consumers were choosing to spend the money they were saving at the pump.

The National Retail Federation, which is expected to update its figures this week, has forecast that sales for November and December will rise 3.7 percent to $630.5 billion from a year ago

Consumers also doled out more generous gift cards this year, according to new data from Stored Value Solutions. The dollar value loaded onto gift cards rose 3 percent year between Thanksgiving and Dec. 25 compared with last year, while the number of cards purchased increased 1 percent.

Though the company doesn't provide an average dollar amount loaded onto cards, it reported that spending on entertainment, with an 18 percent surge, rose the most of any category. Dining was next, rising by 8 percent.

Mild weather and a trend toward buying "experiential gifts" is behind the increases, said Jenny Parris, Stored Value Solutions' senior vice president of global marketing and product.

With warmer-than-normal weather in Minnesota and around the country, apparel sales lagged and many retailers turned to profit-cutting discounts to try to jump-start the winter shopping season.

Sales of electronics were slow, and sales of men's apparel declined overall, according to MasterCard, but the report said "pent-up demand" for apparel showed in an uptick of clothing sales after Thanksgiving.

Retailers won't put a cap on the holiday season until January, as returns and gift-card shopping might put a final spark in what Retail Metrics President Ken Perkins called "a rough and tumble holiday season."

Jackie Crosby • 612-673-7335


Lynn Schneider, left, and Brandi Herzog discuss buying American Girl dolls for Herzog's daughters while shopping at Super Target in Roseville on Thanksgiving night. ] AARON LAVINSKY • aaron.lavinsky@startribune.com Black Friday got an earlier kick off this year on Thanksgiving Day. Shoppers lined up early to be the first to get big deals on their holiday shopping at Target in Roseville Thursday, Nov. 27, 2014.
While many took to the Internet, Lynn Schneider, left, and Brandi Herzog visited Target and mulled buying American Girl dolls in November. (The Minnesota Star Tribune)
FILE - In this May 8, 2015 file photo, gas station attendant Carlos Macar pumps gas in Andover, Mass. Gasoline is close to breaking below a key psychological barrier as drivers enjoy some of the cheapest pump prices since the recession. The nationwide average price of a gallon of regular Saturday, Dec. 12, 2015 was $2.02, down 58 cents from this time last year, according to auto club AAA. Experts say it could drop below $2 in the coming days. (AP Photo/Elise Amendola, File)
Lower prices at the pump allowed consumers to spend more on other goods and services. (The Minnesota Star Tribune)
People look at merchandise while holiday shopping at Best Buy on Thursday, Nov. 26, 2015, in Panama City, Fla. Early numbers arenÌt out yet on how many shoppers headed to stores on Thanksgiving, but itÌs expected that more than three times the number of people will venture out to shop on the day after the holiday known as Black Friday. (Patti Blake/News Herald via AP) MANDATORY CREDIT ORG XMIT: MIN2015121812543936 ORG XMIT: MIN1512181459460994
Customers invaded a Best Buy in Florida on Thanksgiving. Consumers increased spending between Black Friday and Christmas Eve by 7.9 percent from last year’s holiday season. (The Minnesota Star Tribune)
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about the writer

Jackie Crosby

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Jackie Crosby is a general assignment business reporter who also writes about workplace issues and aging. She has also covered health care, city government and sports. 

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