NEW YORK (TheStreet) -- MasterCard Advisors' SpendingPulse reported this week that deep discounts and long hours at retailers such as The Gap (GPS), Macy's (M), and Kohl's (KSS) resulted in an increase in retail spending of 3.5% for the holiday season.
But the sector's reliance on deep discounts could hurt bottom lines when retailers report earnings.
According to a company press release, Amazon.com (AMZN) rang up its biggest holiday season in history. What other retailers notice about Amazon is that more than half its sales were transacted with a mobile device such as a smartphone.
Although those discounts could disappoint investors during the coming earnings season, there has been little disappointment with retail stocks' performance in 2013.
The exchange-traded fund for the sector, the SPDR S&P Retail ETF (XRT) is up more than 40% for the year to around $88.20. Wal-Mart (WMT), the largest retailer, has risen nearly 18% to about $78.40 over the same period. The biggest Internet retailer, Amazon.com, has soared more than 60% in 2013 to near $405 as of Thursday's close.
Equally as impressive for Amazon is its performance during the holiday season.
Over the last month of market action, which was during the holiday shopping period, Amazon had jumped more than 7.0% as of Thursday's close. Over the same period, the S&P 500 was up about 2.3%.
For the holiday season, Amazon shipped about 36.8 million items to its customers around the globe. Amazon reports that there was an average of 426 items heading out of its warehouse doors every second to buyers from 185 countries. As the company added more than one million Amazon Prime Members, which offers free two-day shipping, during just the third week of December, more increases should be in the future.