Holiday shoppers spent more this season, but the upbeat headline hides a patchwork: growth is real, uneven across categories, and tempered by inflation and tariffs.
Visa’s preliminary tally of U.S. payments activity for the seven-week holiday window beginning Nov. 1 showed retail spending up 4.2% year-over-year (excluding autos, gas and restaurants). Mastercard’s SpendingPulse, which tracks all payment types, recorded a similar but slightly smaller rise — about 3.9% — for the same period. Those are modest gains compared with last year’s pace (Visa was at 4.8% a year earlier), and both firms stress these figures aren’t adjusted for inflation.
Why growth looks modest — and where consumers spent
Adjusted for price increases, Visa’s economist Michael Brown says “real” retail volumes grew roughly 2.2% in the period — a quieter expansion than the nominal numbers imply. That gap matters: when groceries, rent and imported goods cost more, shoppers have to be choosier.
Still, digging into categories shows what shoppers prioritized:
- Electronics were the standout, with Visa reporting a 5.8% jump as buyers chased faster, AI-capable devices and other high-performance gadgets.
- Apparel held up, too: clothing and accessories rose faster this season (Visa: about 5.3%; Mastercard reported an even stronger clothing bump in its data).
- Home-related categories lagged. Home improvement and building materials saw little to no growth — a reflection of a still-soft housing market — and seasonal decor performed poorly, partly because many of those items are exposed to tariffs on imports.
Brick-and-mortar still dominated volume: roughly 73% of holiday payment dollars happened in physical stores, with e-commerce accounting for the other 27%. But online was the growth engine — Visa said e-commerce sales rose about 7.8% as early-season promotions and convenience pushed shoppers to click.
Those promotion-fueled online gains were visible in electronics and other gift-oriented categories. If you were hunting for a laptop deal, for example, this season’s discounts helped drive sales (and if you’re comparison-shopping MacBooks, there were deeper MacBook Air deals around Black Friday — and the M4 MacBook models are available on Amazon for anyone still shopping).
A new wrinkle: AI as a shopping tool
This year wasn’t just about sales and promos. Visa and other observers pointed to a growing role for consumer-facing AI: many shoppers used AI to compare products and to narrow down choices. That behavior — aided by chatbots, price-comparison tools and search assistants — likely helped efficiency in shopping and may have amplified online growth. For context on how AI-driven consumer tools are evolving beyond search and into transactional help, see coverage of Google AI Mode's agentic booking moves.
Traffic and timing
Foot-traffic trackers painted a slightly different picture. RetailNext recorded declines in some peak-days compared with last year, suggesting people spread trips across the season and stuck more closely to lists rather than browsing. Meanwhile, major shopping days still lay ahead when Visa released its snapshot — think post-Christmas sales and the Saturday after the holiday — so the full-season picture will firm up once December’s final numbers arrive.
A season of compromises
Tariffs and inflation crept into the story repeatedly. Imported holiday decor, much of it made in countries affected by tariffs, barely budged. And with employment indicators showing strain and consumer sentiment dipping, shoppers traded breadth for depth: more dollars on tangible gifts and gadgets, fewer on nonessentials and home projects.
Retail forecasts largely align with these results. The National Retail Federation had been projecting a low-single-digit gain for November–December sales, and the early Visa and Mastercard snapshots sit squarely in that band.
Numbers-only journalism would stop at the percentages. The fuller picture is of households juggling price pressures and still finding ways to celebrate — whether that means an upgraded phone, a warm coat, or a last-minute online purchase after a friend’s recommendation. The result: a holiday sales season that’s resilient, selective and subtly shaped by new tech tools as much as old-fashioned bargains.