PITTSBURGH (TNS) —This holiday season, consumers nationwide upped their spending in stores and online, according to early data from Visa’s Retail Spending Monitor. Overall retail spending in the U.S. this holiday season increased by nearly 5% from 2023.
Visa’s report reflects spending at retail merchants from the seven-week period following Nov. 1 across all payment methods. It excludes spending in some categories, such as autos, gasoline, restaurants and more, and is not adjusted for inflation.
“The spending growth this holiday season portends continued consumer confidence in their own outlook — jobs, wage growth — and the broader economy going into 2025,” said Visa Chief Economist Wayne Best.
Where are people shopping this holiday season?
In the Pittsburgh area, over 30% of people said they prefer to shop at online-only stores over the holidays, according to a regional survey conducted by Schmidt Market Research in November.
But nationally, in-person shopping experienced the most growth. Visa found that total retail spending in stores increased by 4% from last year — more than double its growth rate from 2022 to 2023.
Online shopping at stores with and without brick-and-mortar locations still increased, but at slower paces than last year, according to the report. And over three-quarters of all payments occurred in store during the seven-week period.
Best said that in-person shopping gains today show “the adaptability of both consumers and retailers” after a slowdown during and after the pandemic.
What are shoppers buying?
Sales of electronics and appliances — from cell phones to washers, dryers and refrigerators — increased significantly this year, according to Visa’s report.
Best said that category saw growth in 2023 as well, but at a slower pace. Increased spending in 2024 could be the result of consumer concern about higher prices next year due to President-elect Donald Trump’s proposed tariffs, he said.
Clothing and accessories sales also rose more this year than last, according to the report. And spending on building materials — such as hardware, paint and gardening supplies — is up nearly 5% after a downturn in 2023.
While power tools and other items in that category make popular Christmas gifts, Mr. Best said, people also could be more motivated to take on home improvement projects amidst an unfavorable housing market and high-interest rates. Four years out from 2020, homeowners who locked in low rates during the pandemic might be ready for upgrades.
“Consumers spending more money on experiences and DIY projects can be an enjoyable way to make homes cozier,” Best said.
Fraud is on the rise
Visa said it blocked almost double the amount of suspected fraud attempts during Black Friday and Cyber Monday in 2024 versus 2023. Throughout the weekend, potential fraudulent transactions rose 200% globally.
That’s likely because fraudsters are using artificial intelligence to launch more sophisticated phishing attacks, holiday travel scams and more, Best said.
In response, Visa started using generative artificial intelligence this year to stop fraud before it happens — part of a five year, $11 billion investment in technology to fight fraud.
What does this mean for spending in 2025?
Overall, Best said Visa’s findings indicate that shoppers are feeling more confident in the economy’s strength.
Spending growth on non-necessity items, from accessories to tech gadgets, was not only sustained, it increased faster this year than last.
“Looking ahead, 2025 will be characterized by continued solid economic growth,” Best said. “As the Federal Reserve trims rates, continued consumer spending and business investment will be core supports to growth.”
