Holiday shoppers in the U.S. have increased their spending during the early weeks of the festive season, though growth has slowed compared to last year. According to new data released Tuesday by Visa Consulting & Analytics, total holiday sales from November 1 through December 21 rose 4.2%, slightly below the 4.8% gain seen in the same period last year.
The analysis, which includes all forms of payment such as cash and card transactions, excludes purchases from gas stations, auto dealerships, and restaurants. Adjusted for inflation, the growth rate softens further to 2.2%, compared to an inflation-adjusted 3% rise in 2023.
“It’s certainly not a spectacular season,” said Michael Brown, Visa’s principal U.S. economist. “Given concerns over economic growth, inflation, and consumer uncertainty, this year’s results reflect an average holiday performance.”
Despite persistent inflation and higher prices for essentials like groceries and rent, consumers have been strategic about their spending prioritizing gifts over nonessential decorations and home items. Retailers have noticed a trend of selective shopping, with households cutting back on discretionary purchases amid financial strain.
The broader economic backdrop has also added pressure. A weakening job market, coupled with tariffs affecting imported goods, has dampened consumer confidence. However, sentiment improved modestly last month as inflation fears began to ease, according to the University of Michigan’s consumer survey.
Visa expects overall holiday sales to align with its full-season forecast of a 4.6% increase for November and December combined. Several of the busiest shopping days, including the day after Christmas and the following Saturday, are still ahead, according to Sensormatic, which monitors retail foot traffic.
E-commerce continues to show stronger momentum, rising 7.8% during the seven-week period helped by early and aggressive online promotions. Still, in-store purchases remain dominant, accounting for 73% of total retail payment volume.
By category, electronics led the growth with a 5.8% sales increase, boosted by demand for AI-powered gadgets. Clothing and accessories followed with a 5.3% rise, up from 4.1% last year, as the segment faced fewer tariff pressures. In contrast, home décor and home improvement items lagged, rising just 0.8% and 1%, respectively, partly due to a sluggish housing market.
The National Retail Federation projects total U.S. holiday sales between $1.01 trillion and $1.02 trillion, marking an annual gain of 3.7% to 4.2% consistent with Visa’s outlook.
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