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Luxury and eCommerce Continue to Post Strong Year-Over Year Growth. Normally a Spending Stalwart, the Electronics Category Is Slightly Down
Purchase, NY, June 03, 2010 -
MasterCard Advisors' SpendingPulse, a macro-economic report tracking national retail and service sales, today provided summary results for performance of specific U.S. retail industries in May, 2010. This month, more retail sectors showed a respite in year-over-year growth, as slow economic recovery appeared to weigh on the U.S. consumer's spending behaviors.
Michael McNamara, Vice President, Research and Analysis for SpendingPulse, observes "The momentum in consumer spending that was building through the first quarter, seems to be taking a breather in the second quarter of 2010, at least so far. Financial volatility in the capital markets and ongoing macroeconomic issues could account for this shadow cast over the recovery in consumer spending. Some sectors seem to be responding to specific disruptive events, such as the expiration of the Federal housing tax credits, where previously we'd noticed a beneficial "echo" effect on housing related categories such as Furniture and Furnishings. In addition, Memorial Day occurring a week later than it did last year, could have pushed some spending into June, 2010. Nevertheless, we continue to see strength in pricing, and in most categories, we are registering solid increases in the SpendingPulse Price Index, indicating that inventories continue to be aligned to demand, and retailers have not had to return to steep discounting."
To watch a short video with additional commentary from Michael McNamara, please visit: http://www.mastercardadvisors.com/us/advisors/en/information_analytics/spendingpulse_podcast.html
In May, growth in eCommerce continued to demonstrate the channel's resilience, forging well ahead of growth in brick and mortar sales. The month of May registered this channel's 8th consecutive month of double digit year-over-year growth, with sales increasing 13.7% over May 2009. The best performing sub-categories of eCommerce were Children's Apparel and Family Apparel, growing 30.4% and 26.2% respectively, on a year-over-year basis.
Luxury sales, which include high-end sales in restaurant, food stores, department stores, and high end retailers from the general apparel category, continued to enjoy a rebound over the very challenging environment of 2009. In May, this category enjoyed its 6th consecutive month of year-over-year growth, posting a 9.7% increase. While this is not as strong as the double digit growth posted in February, March and April of 2010, it continues to build on the momentum of prior months, as the category digs out of 2009's declines. While Luxury continues to be helped by easy year-over-year comparisons, these comparisons going forward will not be as easy as in prior months, as February, March and April of 2009 experienced the largest declines in the category.
Jewelry remained in positive territory enjoying a 6.4% increase for the category as a whole, with independent jewelers enjoying the strongest gains.
Down by 0.7% year over year, the Electronics and Appliances category appeared to take a pause in May. Separated out, Consumer Electronics was down by 0.8% while the Appliance category remained flat. The pause in the Appliance category's growth could be explained by expiration of the Federal Housing Credit at the end of April, while the lack of new product launches in the Consumer Electronics sector could account for any weakness in this usually strong sub-category.
In a second month of decline, total U.S. Apparel decreased 3.7%, with declines in all sub-categories except Children's Apparel. Steepest declines were in Men's Apparel, down 10.4%, the usually strong Footwear category, down 7.3%, and Women's Apparel, down 6.1% . However, pricing continued to hold firm for the category as a whole, showing a healthy 5.4% increase in the overall apparel pricing index, on a year-over-year basis.
For more on SpendingPulse, please visit:
http://www.mastercardadvisors.com/us/advisors/en/merchant_solutions/ms_spendingpulse.html
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