Mastercard SpendingPulse forecasted that U.S. retail sales would grow 7.5 percent year-over-year from mid-July through the Labor Day back-to-school buying period. It anticipates that sales will be up 18.3 percent compared to the pre-pandemic 2019 selling season, with department stores a noteworthy winner as the retail sector continues its recent rebound.
“Back-to-school is the second-biggest season for retailers and is often looked at as an early indicator of retail momentum ahead of the traditional holiday season,” said Steve Sadove, senior advisor, Mastercard and former CEO and chairman of Saks, Inc. “While Mastercard SpendingPulse anticipates growth across sectors, retailers will need to find innovative ways to entice shoppers as discretionary spending potentially stretches thin as a result of increasing prices.”
- In-store sales are expected to be up 8.2 percent year-over-year and ahead 9.9 percent against 2019.
- E-commerce sales are expected to be up 4.3 percent against the year-ago period and ahead 89.3 percent against 2019.
- By sector, apparel is expected to be up 8.7 percent year-over-year and ahead 5.9 percent against 2019.
- Department stores are expected to be up 13.0 percent year-over-year and ahead 27.3 percent against 2019.
- Electronics & appliance sales are expected to be up 5.9 percent year-over-year and ahead 17.6 percent against 2019.
Mastercard said in a statement, “This back-to-school season will be defined by the resilience and flexibility of the consumer. Ultimately, we’ll watch to see how they balance their desire for fresh styles and new experiences with continued price pressures.
Anticipated retail trends for the 2022 back-to-school season include:
- In-Store Experience: Shopping for back-to-school becomes an experience—–from needing to try on new sizes to browsing the latest fashions in person. The return to stores is expected to grow 8.2 percent year-over-year and 9.9 percent YO3Y this season.
- Department Stores Continue Rebounding: Following a multi-year decline, department stores have rebounded after 15 consecutive months of sustained growth. The back-to-school selling season is expected to drive the Department Store sector up 13 percent year-over-year and 27.3 percent YO3Y.
- Stacked Social Calendars Drive Apparel Growth: With weddings, events and vacations booked for the foreseeable future, the demand for apparel sold in-store and online shows no sign of slowing and is forecasted to be up 8.7 percent year-over-year or 15.9 percent YO3Y.”
May Retail Sales Growth
According to Mastercard SpendingPulse, total U.S. retail sales, excluding automotive, increased 10.5 percent year-over-year in May and 21.4 percent compared to pre-pandemic May 2019; this outpaces year-over-year monthly growth thus far in 2022. In-store sales were a key driver, up 13.7 percent compared to pre-pandemic levels.
“The continued retail sales momentum in May aligns with the sustained growth rates we’ve seen so far this year,” said Michelle Meyer, U.S. chief economist, Mastercard Economics Institute. “The consumer has been resilient, spending on goods and services as the economy continues to rebalance. That said, headwinds have become stronger, including gains in prices for necessities like gas, food and higher interest rates.”
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