With known supply chain issues plaguing holiday shoppers, many shopped early to acquire the hot holiday gifts. Mastercard SpendingPulse called 2021 a “resurgent season for retailers” for the holiday season that runs from November 1 to December 24. Retail sales, excluding automotive, increased 8.5% in comparison with 2020. Online sales grew 11% from the same period. The largest increase was seen in the comparison of 2019 to 2021 as online sales grew an overwhelming 61.4%. This trend is not surprising as consumers are still facing a battle with Covid and its variants.
Senior Advisor for Mastercard and former CEO of Saks Inc. Steve Sadove said “Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward.”[1] Black Friday remained the top spending day of 2021. The Thanksgiving weekend drove retail sales to an increase of 14.1% year over year.
Between the retail increase and additional holiday travel, gas prices over the holiday season were in constant focus. The national average over the holiday weekend dropped $0.03 to $3.30 per gallon. However, that average is an increase of $1.09 per gallon from 2020. “A recovering economy coupled with strong employment is leading to increased demand for gasoline,” said Andrew Gross, AAA spokesperson. “This demand increase should drive pump prices higher, but it’s been blunted by the wavering price of crude oil.”[2] As demand for travel increases, the overall price is also increasing. Car rentals have been approximately 20% higher due to the lack of vehicles while air travel is showing an increase of 5% when evaluating ticket prices.
Global airline travel was negatively impacted by the surge in Covid cases from the omicron variant. Between Christmas Eve and Christmas Day, more than 3,800 domestic flights were cancelled. These cancellations only represent around 5% of flights but the disruptions are expected to continue as airline staff call off sick.
As consumers and the economy make strides to “normalize,” Covid variants are still surging around the globe. The impact on travel will still be felt into 2022 while global retailers might be changing for the better. E-commerce was forced to grow at a rapid pace to manage consumer’s needs. Retailers are also venturing to invest in services, like curbside pickup and online order pickup, that allow greater ease in shopping. While not all businesses survived the pandemic, those that are quick to adapt can hopefully look to an even better 2022.
[1] https://www.mastercard.com/news/press/2021/december/mastercard-spendingpulse-u-s-retail-sales-grew-8-5-this-holiday-season/
[2] https://www.thestreet.com/investing/gas-prices-drop-holiday-travel-season-up-1-09-year-over-year
