Retailers ring up highest holiday sales in six years

Minnesota's main streets and malls were brimming on Wednesday as gift card-wielding shoppers, exchange-seekers and perhaps a smattering of folks tired from too much family time set out in search of deals.

"Clearance season is on," declared Marshal Cohen of the marketing research firm NPD Group.

The run-up to Dec. 25 receives the lion's share of attention and advertising heft, but retailers count on the days afterward to move out their remaining merchandise and reel in a final burst of sales before closing their books toward the end of January.

So far, the season is looking pretty rosy.

Buoyed by a robust economy and pent-up demand, holiday shoppers rang up the highest retail sales in six years, according to a report out Wednesday by Mastercard.

The data — which include spending by credit cards, cash and checks — found that sales increased 5.1 percent, to more than $850 billion, from Nov. 1 to Christmas.

Online shopping grew 19 percent compared with last year.

Amazon, the world's second-largest retailer behind Walmart, announced Wednesday it had a record-breaking holiday season, but didn't provide sales numbers. The company, with a double-digit growth rate, said it signed up "tens of millions" of people for its Prime membership, which provides free shipping for a $119 annual subscription fee.

"From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail," Steve Sadove, senior adviser for Mastercard and former chief executive of Saks Inc. said in a statement.

Retail industry analysts estimate that nearly $90 billion worth of gifts are returned each holiday season. At the Mall of America in Bloomington on Wednesday, it wasn't hard to overhear conversations from shoppers returning items that didn't fit or those with gift cards looking for ways to cash in.

Hailey Wright and her friend, Ella Ollenburg, both 12, sat near the Nordstrom entrance surrounded by their day's purchases. The seventh-graders rode in from Clear Lake, Iowa, with Wright's mother, two brothers and another friend earlier in the day.

Ollenburg picked up a pair of jeans, two shirts and a necklace for $40 at PacSun using a combination of sales and points. Wright was using about $500 in Christmas cash to buy mostly clothes and makeup. She saved $30 on an $80 sweater at Garage.

"I need to upgrade my closet," she said.

The Mall of America stepped up security for the high-traffic day. Police with dogs walked the busy corridors and guards checked the bags of everyone entering the mall or coming out of anchor stores.

Ollenburg and Wright said they were told they couldn't be wandering without adults, so they were waiting for the rest of their family.

"This must be new policy," Ollenburg said with a shrug.

At the Target store in Edina, a smattering of predawn shoppers were milling outside a few minutes before the doors opened, which didn't surprise corporate spokesman Joshua Thomas.

"It's a tradition for many families to go shopping the day after Christmas," he said. "Kids are home from college, people have gift cards to spend. They're ready to score some great deals on merchandise."

The days following Christmas are historically among the highest for gift-card redemption for the Minneapolis-based chain, Thomas said.

Richfield-based Best Buy and its Geek Squad staff were gearing up for a busy week, as customers need help setting up all of the high-tech gadgetry they found under the tree.

The company promotes a number of services to help people set up their electronic devices as well as a subscription program it launched in May, Total Tech Support, which provides unlimited Geek Squad support for about $200 a year.

Best Buy's "Autotech" staff members, which are trained to install and service technology in cars, call Dec. 26 their version of "Black Friday." These workers handle three to four times the number of appointments than a normal business day, putting in remote starts, radios and other auto-related technology.

Low unemployment and rising wages have boosted consumer confidence to its highest point in a generation.

A turn of the calendar meant that retailers enjoyed an extra long window between Thanksgiving and Christmas, of five Saturdays and 32 shopping days. Many stores offered the kind of discounts once reserved for the Friday after Thanksgiving weeks earlier than usual.

Target offered free shipping with no minimum purchase and guaranteed a two-day delivery, in hopes of getting a jump start on rival Amazon.com.

The Mastercard Spending Pulse analysis offered some insight into America's taste in shopping this season. Apparel was one of the leaders of the season, growing nearly 8 percent compared with last year, the best mark since 2010. Sales of clothing have been accelerating since a strong back-to-school season.

Home improvement rose 9 percent, with home furnishing and decor notching upward by 2.3 percent.

Sales at department stores declined 1.3 percent, driven by the closures of the Bon-Ton chain and several Sears stores, according to Mastercard, following two years of modest growth. Online sales for department stores grew 10.2 percent.

Jackie Crosby • 612-673-7335 Twitter: @JackieCrosby