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 July, 2010. This month, sales in most categories remained mostly flat compared to July 2009 in contrast to the sharper growth of Q1 and the more moderate growth of Q2, 2010.Here is a related video from Michael McNamara at SpendingPulse.
Michael McNamara, Vice President, Research and Analysis for SpendingPulse, observes "Overall, retail sales continued to tread water, following the pattern set with June's sales when consumers demonstrated a reluctance to make larger purchases, and instead, traded down. Particularly, we are noticing some weakness in industry sectors that rely on higher priced ticket items such as furniture and discretionary areas such as luxury and jewelry. We are also seeing this pattern echoed in the restaurant business, where we have seen consumers shift from full-service restaurants and particularly fine dining, to limited-service and quick-service outlets."
On a positive note, eCommerce, a sector that has posted gains throughout 2010, regained double digit growth in July, increasing 10.9% on a year-over-year basis, in contrast to June, when for the first time since November 2009 it had dipped into single digits.
The SpendingPulse Luxury Index encompasses high-end sales in restaurant, food stores, department stores, and high end general apparel retailers. In July, the category saw a small gain, growing 0.2% year-over-year. Although no longer in negative territory, this essentially flat performance is a notable contrast to the double digit growth the sector enjoyed from February through April 2010, or even the high single-digit growth of May 2010, compared to 2009.
In July the Electronics and Appliances category posted its second month of year-over-year gains, growing by 1%, slightly smaller than June's 1.7% increase. Electronics sales were up by 0.8% in July, probably helped by new product launches, while Appliance sales were up 1.8%. While some of the other housing-related sectors are down, the growth in Appliance sales is a positive sign.
Total apparel sales decreased by 1.1% in July, following June's 3.3% year-over-year gain, with most of the category's sub-sectors posting declines.
Consumption Inflection Point
The spending patterns on big-ticket items noted by SpendingPulse are reflective of attitudes of retail shoppers as discussed in Consumption Inflection Point - No One Wants Credit; Consumer Spending Plans Plunge.
For now, people are spending enough on small items and travel to hold things flat. With the collapse in housing coming up (and housing related transactions like appliances and furniture), how long can that last?
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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