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Meir Kahtan, Meir Kahtan Public Relations, LLC, +1-212-575-8188
Pricing and Tight Inventory Control Help Add Lift to a Stabilizing Environment, While Luxury Bounces Back
Purchase, NY, January 06, 2010 - MasterCard Advisors' SpendingPulse, a macro-economic report tracking national retail and service sales, today provided summary results for performance of specific retail industries in December, 2009. In general, the holiday shopping season ended on a high note for most retail categories. According to Michael McNamara, Vice President, Research and Analysis for SpendingPulse, this was due in part to a disciplined inventory strategy on the part of retailers, and strong pricing performance. "One of the important stories our data is showing is a strong price index in almost every sector," he noted. "Retailers achieved this by keeping tight control over their inventory this year, so avoiding the kind of emergency discounting we saw in 2008, when they were urgently trying to clear excess inventory." The SpendingPulse price index, tracks average ticket size, and can be impacted by discounting and/or a change in product mix.
Added McNamara, "One particularly bright spot for December was online sales up at 17.7% versus the year ago period, which may have been aided by the bad weather. Jewelry, especially at the high end, and consumer electronics, both ended the month strongly. Luxury made something of a comeback, while specialty apparel continued to show weakness - but even there, we saw three months of year-over-year increases in the price index, following twelve monthly declines.
"It is important to remember that these figures are based on comparisons with very weak sales in December 2008," McNamara noted. "Still, it is mildly encouraging to see that most retailers were able to maintain performance after a strong Black Friday start, and that is yet another indication that the retail environment is stabilizing." McNamara observed that this process of stabilization began in the second quarter of 2009, as the rate of decline in sales figures started to fall, and that while it did not mean the economy was growing, "Sales have to stop their precipitous fall before they could begin to show growth again."
Electronics sales for December were up 7.3% year-to-year, the fourth consecutive monthly increase, with a 3.3% increase in the price index over December of 2008.
The eCommerce channel continued to show strong growth. Sales were up 17.7% over December of 2008, making it one of the stars of the season as consumers continue to shift more of their purchasing online.
Luxury excluding jewelry showed a year-over-year increase of 5.5%, following a drop in November of 7.3%. This was the third positive posting since August, with year-over-year increases of 3.4% and 6.5% in September and October, respectively. Jewelry posted its fourth consecutive gain, increasing 6.9% over December 2008. Within the sector, McNamara stated that jewelry continued to be a mixed bag, as the high-end and lower-end stayed strong, while the mid-tier mall-based retailers struggled.
The specialty apparel category had its second month of decline in December, with sales down –1.8% over December 2008. McNamara noted that was an improvement over the –5.7% decline in November, and was considerably better than the 8.9% loss posted in December 2008. Even here, tight control over inventory allowed merchants to maintain their pricing.
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About MasterCard Worldwide
MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.