A surge in online purchases boosted US retail sales over the festive season, underlining the strength of American consumer spending even as slower bricks and mortar growth points to the challenges facing physical stores and shopping malls in the new year.
Figures from payments company Mastercard released on Thursday showed total US retail sales during the crucial period between November 1 and Christmas Eve rose 3.4 per cent from the same period a year ago to almost $880bn.
President Donald Trump tweeted about the figures, which came at the end of a year in which the US consumer has supported global economic growth. “quot;Congratulations America,”quot; he said, hailing them as the biggest in US history.
While the robust headline numbers provide the latest evidence that low unemployment and rising wages have kept Americans spending, the figures also highlight the difficulties facing traditional retailers as ever more shoppers shift online.
Ecommerce sales, which accounted for almost 15 per cent of the total, rose 18.8 per cent over the period. Sales growth at physical stores was a more tepid 1.2 per cent.
US retailers announced 9,300 store closures in 2019, according to Coresight, the most since the group began tracking the data in 2012. That is more than double the number of openings and is up sharply from the 5,844 closures announced last year.
Mastercard’ s figures showed department stores missed out on the festive cheer, posting a 1.8 per cent decline in sales over the period. Clothing sales were also slower than other items, up just 1 per cent.
However, Americans splashed out on electronics and appliances, with sales of those items up 4.6 per cent, while ecommerce sales were strong in several categories.
Shares in US retailers have been volatile this year as Wall Street has tried to weigh up the divergent financial performance of companies in the sector. The S&P retail select industry index lost 18 per cent between its highs in March and lows in August, but has since rebounded about 21 per cent.
Some retailers such as Target and Walmart have shown signs of adapting successfully to the changing environment while others such as fashion retailers Forever 21 and Barneys New York were forced into bankruptcy proceedings this year.