- Mastercard has some good news and bad news for merchants and consumers. The card company is forecasting U.S. retail sales will increase 10% on a year-over-year basis during Thanksgiving Week from Nov. 22 to Nov. 28, according to a press release from the company Monday. Excluding auto and gas sales, which can be difficult to forecast, retail spending is expected to rise 12%, according to Mastercard's SpendingPulse report. The card giant publishes the report gauging consumer demand regularly.
- The survey, across all payment types, also said e-commerce sales are expected to rise 7.1 percent on a year-over-year basis for the week. Compared to 2019, before the start of the COVID-19 pandemic, it forecast sales surge of about 50%.
- Black Friday sales are expected to rebound this year after their 2020 slump caused by a lack of foot traffic. Bricks-and-mortar stores will be more crowded generally during the week, thanks to the return of doorbuster deals and holiday window shopping, but many big-box retailers, department stores and malls will be closed on Thanksgiving day, the report said.
"Holiday lights are shining bright for retailers this year,” said Stephen Sadove, senior advisor for Mastercard and former CEO and chairman of retailer Saks Incorporated. “The consumer is strong and spending. With discounts in short supply, product innovation, availability and sustainability will be deciding factors for consumers eager to cross off their holiday shopping lists," he added in the press release.
Though spending in key gift-giving categories such as apparel (+56%), electronics (+29.6%), and jewelry (+39.7%) is expected to rise by double-digit percentages this year it may lead retailers to “discount strategically to manage product inventory and shipping constraints,” according to Mastercard.
Like its larger rival Visa, Mastercard is expanding in the payments business.
Earlier this year, Mastercard announced that it was launching a buy now-pay later service that will allow consumers to split their payments into four installments. The company estimates the total addressable market for payment flows at $255 trillion. It is targeting disbursements and remittances business-to-business accounts payable and consumer bill payments, which the company expects to grow at double-digit percentage rates,
The Purchase, New York-based company is building a stack of services to support market participants and has started to adapt its core network to cryptocurrencies. In July, Mastercard unveiled a pilot program to convert crypto from outside the company's network to fiat currencies inside the network.