Just as it was foretold in the annals of The Outcome months ago, the holiday shopping season was a modest one for retailers for both online and brick-and-mortar sales.
The average in-store transaction amount at department and big-box stores were mostly flat in November and December of this year compared to the same period in 2023, as consumers continued to limit their spending due to the continued effects of inflation,according to a new sales data analysis conducted by purchase platform Attain. Clothing transaction amounts at brick-and-mortar stores during this period were up a single percentage point, while sales for electronics were down nearly 5 percent from the year prior.
Changes in the average transaction amounts for online sales were mixed. The average transaction amount for department stores’ online sales increased 2.24 percent from 2023, but big-box stores saw their ecommerce sales drop almost 2 percent. Transaction amounts at online marketplaces, Amazon being the most obvious and biggest, were down 1.79 percent this November and December from last year. Online sales for electronics increased a solid 8.93 percent per transaction — thank you, Cyber Monday, for the new flat screen TV — but online clothing sales were down a whopping 14 percent from the year prior.
The uneven sales results underscore a recurring theme in Attain’s retail coverage: Americans are still feeling the sting of inflation and have seemingly pulled back on their spending in response.
For several years, the post-pandemic economy seemed to defy conventional economic logic, as consumer spending remained strong despite some of the highest inflation rates in American history. As recently as last summer, people still hadn’t pulled back on their dining out budgets, usually a good proxy for consumer spending as a whole, for example. The strange set of economic circumstances was coined the “vibecession,” where consumers had negative perceptions of the economy but continued spending anyway.
Since the fall, however, consumers have shown themselves to be more budget-conscious, a seemingly delayed reaction to the high prices caused by inflation. Online retailers tried to avoid the consumption slump that typically comes in a presidential election year by moving up their holiday sales into October, but consumers were’t especially responsive to this tactic. That November, consumers told Attain they were planning to spend less this holiday season, specifically because of inflation. Consumers weren't as excited about Cyber Monday, and sales were similarly lackluster in December. The net effect was a holiday that was more ho-hum than ho-ho-ho.
The vibes are still mixed headed into 2025, according to the University of Michigian’s consumer sentiment survey, so expect brands to continue emphasizing their value to consumers in marketing. If nothing else, we can thank the vibecession for bringing back the McDonald’s value menu.
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