Retail sales stagnate – Credit card boost indicates a change in behavior

The retail landscape shows a mysterious phenomenon at the end of the year: while retail sales stagnate, credit card transactions are experiencing an unprecedented boom. David Rosenberg, founder and president of Rosenberg Research, has highlighted this paradoxical development in his recent analyses, raising important questions about consumer psychology and spending behavior.

December Paradox: Sales Stagnate While Credit Card Boom Continues

In December, traditional retail sales remained remarkably stable, showing little movement upward or downward. At the same time, the annual rate of credit card spending increased by nearly 13.4%. This discrepancy between stagnant traditional sales figures and growing credit card usage underscores a fundamental shift in consumer behavior. While brick-and-mortar retail sales have plateaued, a large portion of purchasing power has shifted into the digital space or to alternative channels.

A Decade Record in Credit Card Usage – Where Is the Money Going?

The 13.4% increase in credit card spending marks the highest level during the holiday sales period in the past six years. Even more noteworthy is the historical perspective: this is only the second instance of such a significant rise in the past twenty-five years. This rare occurrence indicates extraordinary consumption patterns. Yet, while credit cards are being used at record levels, measured retail sales remain stagnant—a puzzle that raises a key question for experts: where exactly is this massive credit card purchasing power flowing?

The Migration of Consumer Behavior

Speculations are emerging about potential destinations for this extraordinary credit card activity. One explanation focuses on non-traditional areas of spending such as sports betting, online entertainment, or digital services. These sectors are not reflected in traditional retail measurements but may explain why conventional retail sales are stagnating while credit card usage is simultaneously exploding. The classic retail sector is not stagnating due to a lack of purchasing power but because consumers are directing their available funds into entirely different areas—a fundamental structural change in consumer patterns.