According to Mastercard SpendingPulse*, U.S. retail sales are expected to grow 5.5 percent during the critical July 15 through September 6 back-to-school period compared to 2020. Compared to 2019, sales are expected to grow 6.7 percent.
In the period from July 15 to September 6,
- E-commerce sales are expected to decline 6.6 percent against the same year-ago period but climb 53.2 percent against the same period in 2019;
- Apparel is expected to jump 78.2 percent against the same year-ago period and increase 11.3 percent against the same period in 2019;
- Electronics are expected to climb 13.0 percent against the same year-ago period and gain 9.6 percent against the same period in 2019; and
- Department stores are expected to climb 25.3 percent against the same year-ago period and advance 9.5 percent against the same period in 2019.
“Back to school has always been a prime season for retailers. This year, the broader reopening brings an exciting wave of optimism as children prepare for another school year and the grown-ups in their lives approach a similar ‘return to office’ scenario,” said Steve Sadove, senior advisor, Mastercard, and former CEO and Chairman of Saks Inc. “This back-to-school season will be defined by choice as online sales remain robust, brick and mortar browsing regains momentum and strong promotions help retailers compete for shoppers’ wallets.”
Sector-Level Back-to-School Trends
As the U.S. reopening occurs and consumers return to brick and mortar, Mastercard anticipates e-commerce sales will ease slightly compared to last year, -6.6 percent, but remain up, +53.2 percent, when compared to 2019. In terms of what consumers are buying this back-to-school season, it anticipates the following retail trends:
- Apparel Refresh: While athleisure was the fashion statement of 2020, this year brings the diversification of the wardrobe as in-person schooling, reunions and other events drive consumers to purchase more. Apparel is expected to grow 78.2 percent year-over-year or 11.3 percent YO2Y.
- Department Store Shopping Returns: Malls, department stores and outdoor shopping centers will offer a change of scenery for shoppers. Mastercard forecasted a 25.3 percent year-over-year, 9.5 percent, YO2Y increase in the Department Store sector as it rebounds from last year. Buy online, pick-up in-store, and contactless shopping will remain important as consumers continue to seek low-contact experiences.
- Tech Upgrade: With many states and schools determining the virtual/in-person experience, it anticipates Electronics will be up 13.0 percent year-over-year or 9.6 percent YO2Y.
Building on Ongoing Retail Momentum
The anticipated back-to-school sales growth is a continuation of ongoing retail sales momentum with May marking the eighth consecutive month of Total Retail Sales growth. According to Mastercard SpendingPulse, U.S. retail sales, excluding automotive and gasoline, increased 12.2 percent year-over-year in May and 10.2 percent compared to May 2019. Online sales in May grew 1.1 percent and 94.8 percent respectively, compared to the year-ago same period
For May 2020:
- Apparel sales grew 75.9 percent year-over-year and gained 14.7 percent versus the same period in 2019;
- Department stores sales grew 212.0 percent year-over-year and improved 4.2 percent versus the same period in 2019;
- Furniture and furnishing sales increased 22.5 percent year-over-year and advanced 20.2 percent versus the same period in 2019;
- Grocery sales grew 4.8 percent year-over-year and increased 14.4 percent versus the same period in 2019;
- Jewelry sales jumped 203.4 percent year-over-year and climbed 44.7 percent versus the same period in 2019;
- Lodging sales grew 254.4 percent year-over-year but declined 1.5 percent versus the same period in 2019; and
- Restaurants sales grew 84.7 percent year-over-year and moved up 7.9 percent versus the same period in 2019.
*Mastercard SpendingPulse reports on national retail sales across all payment types in select markets worldwide. Its findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms such as cash and check.
Illustration courtesy Mastercard SpendingPulse