Surveys

Mastercard Makes Its 2023 Holiday Prediction

SurveysSep 26, 2023

Mastercard Makes Its 2023 Holiday Prediction

According to SpendingPulse, retail sales will increase in November and December but not necessarily for jewelers.

Gold holiday gift boxes
Mastercard predicts retail sales will grow 3.7 percent in November and December, though jewelry sales are forecast to remain essentially flat amid a “rebalancing” in consumer spending.
Purchase, N.Y.—‘Tis the season for the holiday forecasts to keep rolling in.

Mastercard released its outlook for the 2023 holiday season last week and, like Bain & Company and Deloitte, it expects retail sales to grow, but not by much.

According to Mastercard SpendingPulse, U.S. retail sales (excluding automobiles) will increase about 4 percent year-over-year during the holiday season, defined as Nov. 1-Dec. 24.

SpendingPulse measures both online and in-store retail stores across all forms of payments (not just Mastercard purchases). It is not adjusted for inflation.

Consumer spending is expected to rise across all but one of the five categories SpendingPulse tracks—jewelry.

Jewelry sales are expected to decline 0.3 percent year-over-year amid what the company described as a “rebalancing” in consumer spending.

In 2022, there was pent-up demand. Consumers had excess savings and wages were rising while inflationary pricing aided retailers.

This year, Mastercard expects spending to normalize in line with macroeconomic trends. Demand is leveling off and consumers are finding themselves with less of a financial cushion as inflation continues to cut into their savings.

The fine jewelry industry already has begun to witness the slowdown after two years of sky-high sales.

The industry’s largest retailer, Signet Jewelers, had a rough second quarter due in part to a decline in the number of engagements while De Beers Group is spending $20 million to ensure consumers stay interested in diamonds, natural diamonds specifically. 

“This holiday season, retailers will be vying for consumer dollars. With numerous choices and tightening budgets, you can anticipate shoppers to be increasingly selective and value-focused,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Inc. 

“We expect the most effective holiday strategy will be to meet consumers where they are— personalized promotions to in-store experiences will be key in doing so.”

 Related stories will be right here … 

The two categories Mastercard SpendingPulse predicts will post the largest increases in spending this holiday season are electronics (up 6 percent year-over-year) and restaurants (up 5 percent year-over-year). 

Mastercard said electronics, gadgets and gaming are expected to be popular among consumers this year, as artificial intelligence, immersive experiences, and digital workspaces continue to the change the way people work and play. 

In addition, consumers who purchased new electronics at the onset of the pandemic may be looking to upgrade this year. 

As for restaurant spending, the company said consumers are keen on gathering with loved ones for shared meals and festivities outside of the home after a few years of being isolated. 

When it comes to where consumers will be shopping this holiday season, Mastercard said this season’s shopper is looking to “make purchases anytime, anywhere.” 

It predicts in-store sales will increase 3 percent year-over-year while e-commerce sales are expected to grow 7 percent. 

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