Mastercard Sees 5.5% Growth In U.S. Holiday Retail Spending.

U.S. retail sales are expected to increase 5.5% year over year during the 2026 holiday shopping season, according to the Mastercard Economics Institute, which is forecasting the strongest holiday growth since 2022.

The forecast covers the period from Nov. 1 through Dec. 24 and excludes automobile and gasoline sales. It’s based on Mastercard SpendingPulse data, which measures in-store and online retail spending across all forms of payment.

Online sales are projected to increase 11% from a year earlier, while in-store sales are expected to rise 3.6%. Mastercard said the projected in-store increase would represent the strongest growth for physical retail in four years.

The forecast comes as consumers enter the holiday season with spending supported by employment, wage growth and household wealth. Mastercard said higher-income households have led spending, although purchases have continued across income groups.

Higher prices also are expected to account for about half of the projected spending growth. Mastercard attributed the price impact in part to elevated energy costs and demand associated with artificial intelligence.

The calendar could influence the timing of holiday purchases. Thanksgiving falls relatively late this year, shortening the period between Thanksgiving and Christmas and potentially prompting retailers to begin promotions earlier. Cyber Monday also falls in November, concentrating online shopping activity into the Thanksgiving weekend.

Artificial intelligence is another factor shaping the holiday shopping season. Mastercard examined spending by consumers it identified as “AI power users,” defined as people with paid AI subscriptions, and compared their activity with consumers without paid subscriptions.

The analysis found that AI power users spread their spending across a broader range of merchants, including smaller and boutique retailers. The pattern was particularly apparent in categories such as beauty services, specialty food stores, florists and restaurants.

AI users also tended to begin holiday shopping earlier. During the 2025 holiday season, they spent a larger share of their holiday dollars before Thanksgiving than non-AI users, particularly on travel, clothing and jewelry.

Mastercard’s analysis also found that last-minute shopping can coincide with higher purchase values. During the 2025 holiday season, more than 35% of in-store spending in jewelry, handbags, department stores and cosmetics between Nov. 22 and Dec. 25 occurred during the final week before Christmas.

Across online and in-store purchases in those categories, average purchase values increased each day beginning Dec. 15 and reached their highest point on Christmas Eve.

Shopping malls also accounted for a significant share of late-season spending. Mastercard estimated that more than 6% of annual spending at U.S. shopping malls occurs during the week before Christmas, about twice the share recorded at comparable gift-oriented retailers outside malls.

Electronics is another category Mastercard expects to perform strongly. The institute said spending on consumer electronics and software has increased 10.7% year over year so far in 2026.

Overall, Mastercard’s forecast depicts a holiday season in which consumers are expected to continue spending across both physical and digital channels while using AI and other tools to discover products, compare options and make purchases earlier in the season.

Meanwhile, Cyber Week shopping is beginning earlier each year, creating new challenges for retailers preparing to prevent fraud, according to a report from fraud prevention and risk management platform Accertify.

The company analyzed more than 576 million Cyber Week transactions from 2021 through 2025 and found that retailers increasingly have extended promotions into the days preceding Thanksgiving and later into the weekend to capture consumer spending before traditional peak shopping days.

Transaction volume on Wednesday and Tuesday increased 66% and 61%, respectively, during the five-year period. That compares with growth of 37% to 39% on Black Friday and Cyber Monday. The shift has increased the share of Cyber Week activity occurring before Thanksgiving. That portion rose from 21.8% of total Cyber Week volume in 2021 to 24.2% in 2025.

Thanksgiving Day also has become a larger shopping day, with sales volume increasing 22% over the five-year period, Accertify reported.