Retail spending during the 2024 holiday season exceeded expectations, with consumers demonstrating resilience in the face of economic uncertainties. According to Mastercard SpendingPulse, total retail sales from Nov. 1 to Dec. 24 increased by 3.8% year over year, surpassing the previously forecast rise of 3.2% and topping the 3.1% increase during the same period last year.
This growth was primarily driven by a surge in online shopping, which saw a 6.7% increase compared to the previous year. In contrast, in-store sales experienced a more modest 2.9% growth. The convenience of online shopping, coupled with services like “buy online, pick up in-store” (BOPIS) and fast, free deliveries, contributed to this trend.
Despite a shortened holiday season with fewer days between Thanksgiving and Christmas, consumers managed to maintain strong spending levels. The last five days of the holiday season accounted for 10% of all holiday spending, implying steady spending throughout the period without a significant last-minute push.
Specific categories saw notable growth, with apparel sales up 3.6%, jewelry increasing by 4%, and electronics rising 3.7% compared to the previous year. The popularity of gift cards remained high, with 53% of shoppers requesting them this holiday season.
Visa’s analysis corroborated these trends, reporting a 4.8% year-over-year increase in overall holiday retail spend across all forms of payment. Visa’s data showed that 77% of total payment volume was in-store, while 23% was online, highlighting the continued importance of the in-store experience for consumers.
The National Retail Federation (NRF) had set optimistic expectations for the season, predicting consumer spending would reach a record $902 per person on average across gifts, food, decorations and other seasonal items. This forecast represented an increase of about $25 per person compared to the previous year. Based on the Visa and Mastercard data, spending may have outperformed the NRF’s predictions, which called for the equivalent of 2.8% growth.
In the trucking industry, the holiday shopping surge had a noticeable impact on capacity and pricing. Tender rejection rates, a measure of available trucking capacity, rose significantly during the holiday period. The Outbound Tender Reject Index (OTRI) increased by 286 basis points to 9.34% in the week leading up to Christmas, reaching its highest level in more than two years and eventually topping 10.1% on Dec. 22.
(The Outbound Tender Reject Index measures the percentage of truckload shipments rejected by carriers. The National Truckload Index is a fuel-inclusive average of dry van truckload spot rates in U.S. dollars per mile.)
This tightening of capacity led to an increase in spot rates for trucking services. The National Truckload Index, which includes fuel surcharges and various accessorials, rose to $2.46 per mile, 10 cents higher than the previous year. The linehaul variant of this index, excluding fuel surcharges, increased to $1.91 per mile, 18 cents higher than the previous year.
The relationship between retail spending and trucking capacity was particularly evident in major markets. Cities like Chicago, Los Angeles, Dallas and Atlanta all experienced significant increases in tender rejection rates, indicating tighter capacity as retailers rushed to meet holiday demand.
The reefer market, crucial for transporting temperature-sensitive holiday goods, saw the most dramatic tightening. Reefer tender rejection rates surpassed 20%, more than double the rate from the previous year.
This data paints a picture of a robust holiday retail season that not only met but exceeded expectations. Consumers showed a willingness to spend despite economic pressures, with a clear preference for online shopping. The resulting surge in demand had a direct impact on the trucking industry, leading to tighter capacity and increased pricing power for carriers during the peak holiday shipping season.
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