According to Mastercard SpendingPulse, online spending for the expanded holiday season from October 11 to December 24 increased 49% from last year. That’s a significant but not exactly surprising shift from traditional brick and mortar, in-store spending. The online spending realities helped lift Amazon, Inc (Nasdaq: AMZN) nearly 4% on Monday.

While shoppers shopped early and online, it was the overall trend in holiday spending that was a surprise. Namely, the 3% rise in holiday spending this year. Analysts were expecting a 7% decline heading into the holiday season, but they ended up being wrong. The surprise in overall spending and stimulus may have reinvigorated department stores, but what do the numbers say?

Holiday Spending Sector Breakdown

The illustration below from the Mastercard SpendingPulse shows the expanded holiday season beginning on October 11 and excludes automotive and gasoline spending.

Apparel was way down year-over-year (yoy) along with department stores, luxury, and jewelry. If you were to walk into a department store, these items would dominate your view and yet they performed the worst.

Taking the next step and comparing the e-commerce sales for these sectors reflected growth, but mostly below the overall increase of 49% for online spending yoy. For example, department stores only saw a 3.3% increase in online sales growth from 2019.

Holiday Spending Winners and Losers

Looking at the data, it suggests that home improvement and furniture were the big holiday spending winners this season. However, these stocks performed quite poorly on Monday. For example, Wayfair Inc (NYSE: W) finished the trading session down 5.77%. Not exactly what you would have expected based on the data. Another name in the home improvement space is Lowe’s Companies Inc (NYSE: LOW), which finished 0.45% lower on the session.

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While department stores were essentially a loser on holiday spending, they were a winner on Monday. For example, Macy’s Inc (NYSE: M) closed nearly 8.5% higher, Dillard’s, Inc (NYSE: DDS) closed 8.39% higher, and Kohl’s, Corp (NYSE: KSS) closed 3.14% higher.

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That’s quite a turn of events given the data!

Conclusion

Holiday spending is in the rearview as we move into 2021. Yes, it was a great 2020 for many of the home furnishing names, but that was then, and this is now. The realities that we’re still mired in a recession has to weigh at some point on the overall stock market picture.

However, for now, the hope of the market is in stimulus, a weak dollar, and the hope that the legacy brick and mortar stocks will stage a return. That return may look very different than the past as stores become distribution centers as they transition to expand their online share of consumer spending. A successful transition with fewer small business competitors and less overhead may be exactly what investors are buying today.