The major payment networks are feeling the holiday spirit.
On Tuesday, Visa projected holiday spending in the U.S. will be up 4.2 percent year-over-year, led by sales in electronics. And Mastercard forecast a 3.9 percent year-over-year gain, with apparel the top category generating a 7.8 percent sales increase.
Those estimates fall in line with the 3.7 percent to 4.2 percent holiday sales gain predicted by the National Retail Federation in November.
The NRF also predicted holiday sales in the U.S. will surpass $1 trillion for the first time this year, up from the $976.1 billion in 2024. Visa and Mastercard did not issue dollar estimates on holiday sales.
Forecasts on holiday spending will vary based on the methodologies used by the different organizations and businesses.
Visa’s holiday spending forecast is based on data gathered Nov. 1 to Dec. 21 this year, and retail spending reports from the government’s Census Bureau. Visa’s figures are not adjusted for inflation, which is currently tracking at 2.7 percent in the U.S.
“This is shaping up to be an average holiday season, not a gangbuster, consistent with what we have seen over the last three years,” said Michael Brown, Visa’s principle U.S. economist, in an interview. “Consumer spending remains fairly resilient in light of inflation being top of mind for consumers, uncertainty about the economic outlook, and because job growth has downshifted, while income levels are holding.”
Wayne Best, chief economist at Visa, said in a statement: “This season also marked a turning point, with artificial intelligence shaping how people discover products, compare prices and interact with offers. This led to a more informed, more intentional consumer, ensuring they could stretch their discretionary spending.”
According to Visa:
- Spending in physical stores stayed strong for the holiday season, rising 3 percent and accounting for 73 percent of total holiday payment volume.
- E-commerce continued to expand, with online retail spending rising 7.8 percent, driven by early-season promotions and convenience, and accounting for 27 percent of total holiday payment volume.
- Electronics sales during the holiday season have been strong, jumping 5.8 percent and fueled by “demand for high-performance devices in the AI era.”
- General merchandise stores saw a 3.7 percent lift in sales with consumers seeking convenience.
- Apparel and accessories sales climbed 5.3 percent.
- Furniture and home furnishing sales rose 0.8 percent, reflecting “a consistent seasonal demand.”
- Building material and garden equipment decreased by 1 percent.
The Mastercard report is also based on data gathered from the Nov. 1 to Dec. 21 period, and excludes automotive sales. The Mastercard Spending Pulse measures in-store and online retail sales representing all payment types, and is not adjusted for inflation.
According to Mastercard:
- E-commerce sales surged 7.4 percent, while in-store sales grew 2.9 percent “highlighting the rise of blended shopping experiences.”
- Apparel spending climbed 7.8 percent driven by seasonal deals and gift giving.
- Restaurant spending grew 5.2 percent showing consumers’ “strong appetite for experiences and connection during the holidays.”
