2016 Holiday retail spending strongest in five years

Retail spending growth in November and December of 2016 was the strongest it’s been in five years. According to the Visa Retail Spending Monitor, which tracks U.S. consumer spending on Visa payment products, retailⁱ sales grew by 4.8 percent through the holiday season, as compared to the same period in 2015.

More and more consumers turned to their mobile phones and computers to do their holiday shopping. According to VisaNet, one of the world’s most advanced processing networks, e-commerce spending this past holiday season experienced 19 percent growth—up from 14 percent in 2015. This data is in line with Visa’s October forecast, which anticipated that online shopping would increase by at least 18 percent year-over-year.

What’s enabling that growth? Greater U.S. consumer confidence,ⁱⁱ for one, thanks to strong job and wage growth during the holiday months. December’s 2.9 percent was fastest year-over-year wage growth seen in nearly eight years and, in November, more than 200,000 jobs were created—demonstrating a strong labor market.ⁱⁱⁱ

Online retailers shared a larger portion of the holiday spend in 2016. E-commerce represented a 24 percent share of holiday retail spend in 2016, up from 21 percent in 2015. E-commerce share of total spend also increased 3 percent from 2015. E-commerce is also becoming increasingly important early in the holiday season, as consumers rely on pre-holiday shipping promises. In November 2016, more than 25 percent of holiday retail was e-commerce, up from almost 22 percent in 2015.

While e-commerce helped fuel all the peak shopping days during the holiday season, Cyber Monday was still the largest e-commerce shopping day of the season. Spending on a mobile device continues to gain in popularity, and is expected to continue to rise in the coming years.

All data used in the statements above are sourced from VisaNet or Visa’s Retail Spending Monitor unless noted otherwise.

About Visa's Retail Spending Monitor

Drawing upon the power of the world’s largest payment network, Visa’s Retail Spending Monitor provides a real-time window into how and where Americans are spending their money - and its broader impact on the economy. With billions of transactions flowing through its payment network each day, Visa has visibility into roughly 25 cents of every retail dollar spent in the United States. Using these actual transactions as a starting point, Visa has created a sophisticated, robust model that allows it to gauge overall spending activity across all forms of payment and across major spending categories, including retail, travel and entertainment. The RSM relies on aggregated, depersonalized transaction data and is not reflective of Visa’s operational and/or financial performance. The RSM is published by Visa Performance Solutions (VPS), which draws upon Visa’s proprietary transaction data and deep knowledge of the payments industry to advise financial institutions and merchants around the world on ways to improve and grow their business. VPS provides a range of consulting services and other resources to address the challenges that its partners face, from turnkey marketing programs to custom advice on increasing customer loyalty and engagement. For more information, please visit the website at Visa.com/VPS.

ⁱ Retail shopping less autos, gas, and restaurants. Includes retail goods (e.g. electronics, sporting goods, jewelry, cosmetics, computer stores, toy stores), retail services (e.g. beauty/health shops, personal services, charity/social services), department & apparel stores, and home improvement.

ⁱⁱ Conference Board

ⁱⁱⁱ Bureau of Labor Statistics