A report from SpendingPulse on national retail and services sales for the month of February has shown that growth continued in most sectors, but slightly less robust than prior months.
SpendingPulse says ongoing strong performance by the financial markets and growing consumer confidence may have contributed to ongoing retail growth, especially in the upper tier of the different categories.
February held onto the momentum from the last few months, says Michael McNamara, Vice President, Research and Analysis for MasterCard Advisors SpendingPulse. This is even in the face of the disruptive weather that put a damper on spending in several sectors.”
However, February’s year-over-year growth rates were smaller in most categories than those recorded in the November 2010 through January 2011 period.
McNamara also observes that the effects of rising gasoline prices have not yet been fully felt in the market. February traditionally marks the low point of the year in consumer gasoline pumping. We will be watching gasoline demand closely over the next several months to see what, if any, effect the increased costs have on consumer behavior.
If gasoline prices continue to rise, this would mean less disposable income for other retail sectors. If consumers cut back on driving, this could put pressure on categories such as the travel industry and some segments of the restaurant sector, while benefitting online retail, McNamara says.
e-Commerce posted its fourth consecutive month of double-digit growth, rising by 13.2%, slightly higher than January’s 12%, due to strength in a wide range of other sectors and declines only in a few categories. Online Total Apparel grew by 13%, marking the 15th straight month of double-digit increase. Jewelry e-Commerce posted year-over-year growth of 7.2% after January’s 9.2% decline. Electronics e-Commerce grew by 5.4% in February, its sixth straight month of growth, albeit at a slightly lower rate than in January.
Total Apparel sales grew by 6% over February 2010, making for seven straight months of growth, although at the lowest rate of growth since September, SpendingPulse says. Sales in all Apparel sub-sectors were positive, from a modest increase of 0.8% for Footwear to a 10.7% increase in Children’s.
The Furniture sector showed a 4th consecutive month of positive growth with February growing 4.0% compared to February 2010. This is the longest streak of positive growth for the sector since the Spring of 2007, SpendingPulse says. A positive President’s Day holiday in February also helped this segment in 2011. President’s Day is one of the more important sales events for the Furniture sector during the year.