Sector in US buoyed by 3.4% gain over shorter holiday season, report finds

Holiday retail sales in the United States increased 3.4 percent overall this year, while online sales rose 18.8 percent despite a shorter season, according to a credit card company report issued on Thursday.

Mastercard SpendingPulse tracked retail sales from Nov 1 through Dec 24, Christmas Eve. Most holiday shopping is completed between Thanksgiving and Christmas Eve. But Thanksgiving was six days later this year than last, shortening the traditional holiday rush.

"Due to a later than usual Thanksgiving holiday, we saw retailers offering omni-channel sales earlier this season, meeting consumers' demand for the best deals across all channels," Steve Sadove, senior adviser for Mastercard and former chairman of Saks, said in a statement. "E-commerce sales hit a record high this year with more people doing their holiday shopping online."

Mastercard SpendingPulse said total apparel sales increased 1 percent overall this year from 2018 and e-commerce sales in the sector were up 17 percent from Nov 1 to Dec 24.

Jewelry sales grew 1.8 percent overall while online sales increased 8.8 percent. Electronics and appliance were up 4.6 percent overall and 10.7 percent online.

Overall, department store sales were down 1.8 percent, underscoring the importance of using the internet as a tool to drive overall sales, Mastercard SpendingPulse said.

On Wednesday, US President Donald Trump tweeted: "2019 holiday retail sales were up 3.4 percent from last year, the biggest number in US history. Congratulations America!"

In 2017, holiday shopping sales increased 5.1 percent from the previous year, Mastercard told Reuters. But Trump is correct if "the biggest number" refers to total retail sales, not the percentage gain year-over-year. The strength of the US economy is likely to be a key issue in Trump's 2020 re-election bid.

Online retailer Amazon put out a release on Thursday claiming a "record-breaking" season.

"This holiday season has been better than ever thanks to our customers and employees all around the world," said Jeff Bezos, Amazon founder and CEO.

The Seattle-based giant also said it was "a record-breaking holiday season for independent third-party sellers－mostly small and medium-sized businesses－with worldwide unit sales seeing double-digit year-over-year growth, surpassing a billion items sold in Amazon's stores.

In October, Amazon said third-quarter sales rose 24 percent from 2018 to $70 billion.

On Thursday, the Nasdaq Composite Index crossed the 9,000-point mark for the first time as all three major Wall Street indexes posted record closing highs, boosted by optimism over US-China trade relations and gains in shares of Amazon, which climbed 4.4 percent.

Tiffany, a high-end jeweler, said sales increased 3 percent overall since Nov 1, driven by strong sales in China. The company didn't break down its bricks-and-mortar and e-commerce sales.

"We are pleased to present out interim sales results for this important season, which reflect improved global trends compared to previous quarters this year," Tiffany's CEO Alessandro Bogliolo said in a statement.

The National Retail Federation, a trade group based in Washington, said it was encouraged by initial steps in a phase one trade agreement with China.

"For the first time in months, the United States and China are moving in the right direction on tariffs and we congratulate negotiators from both sides," David French, the federation's senior vice president for government relations, said in a statement.

"Tariffs create uncertainty and costs for American retail supply chains and the trade war won't be over until they are eliminated completely. We agree that we need to realign out relationship with China, but tariffs that harm American businesses, workers and consumers are not the answer."

US retail sales, which account for about two-thirds of gross domestic product, have risen steadily from $399.53 billion in 2000 to $701.2 billion in 2018. Retail sales dipped slightly in 2008 and remained flat in 2009 in response to the bursting of the subprime mortgage housing bubble and subsequent economic slowdown, reported Statista, a private-sector provider of market data.

Estimates for total holiday sales in 2019 ranged from $729.3 billion to $1 trillion.

Now employment is at record highs and interest rates are low, thanks to three cuts of a quarter of a percentage point each by the US Federal Reserve.