Holiday cheer hits retail, with strongest seasonal sales in 6 years

Corrections & Clarifications: An earlier version of this story gave an incorrect figure for holiday sales. 

Santa's gift to retailers this holiday shopping season was more business.

Holiday sales grew 5.1 percent this year to more than $850 billion, making it the best season in the last six years, according to data Mastercard released Wednesday. In addition, online sales jumped 19.1 percent compared to last year.

The Mastercard SpendingPulse report tracks retail spending across all payment types, including cash and check, between Nov. 1 and Dec. 24.

The apparel and home improvement categories saw the most growth, the research found. Clothing, which benefited from a strong back-to-school season, boomed with a 7.9 percent increase over 2017 – its best numbers since 2010. And thanks to a running start before the holiday season, home improvement saw a 9 percent hike.

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In contrast, electronics and appliances dropped 0.7 percent.

Department stores experienced a 1.3 percent decrease from last year, though growth has been below 2 percent for the previous two years, partly due to stores closing, Mastercard explained.  But if you jump from department stores' in-store sales to their online ones, the retailers saw strong growth as Internet sales grew 10.2 percent.

Still, lousy weather put a damper on popular shopping times, like cold weather on Black Friday morning on the East Coast, wet weather the weekend of Dec. 15-16 on both coasts and storms in the East on Dec. 21, according to Mastercard.

"Gas prices are low. People are benefiting from lower tax rates," said Steve Sadove, Mastercard senior advisor. "You have an environment where people are, bottom line, feeling good about their own personal financial situation and that’s been reflected."

Also putting shoppers in the mood to spend: a low unemployment rate, a decline in news about retail's imminent death and rising consumer confidence, according to Bob Phibbs, CEO of the New York-based consultancy The Retail Doctor.

"The reality is the consumer felt comfortable enough to splurge and we’re hearing more and more it's for items for themselves," he said, but added concerns about tariffs and the partial current government shutdown could put a damper on 2019's retail outlook.

Mike Keaton of Washington, D.C., contributed more than $500 to the country's spending tally – all for the nine relatives and friends on his Christmas list and nothing for himself. The 43-year-old public relations executive's purchases were done exclusively online and included store and restaurant gift cards, books and Blu-rays.

"It’s more convenient. It’s simple. Shipping doesn't take too long to get to you for the most part," he said. "Mid-November, I stop buying stuff for myself, so I can put together a list. I’m someone who if I see something I want, I go ahead and buy it."

Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer