Luxury, Web sales drive retail boost
San Francisco, April 7, 2010
Luxury retailers and e-commerce sites logged the best retail sales growth during March, pointing to growing momentum within the retail sector, according to a report.
Sales of luxury items rose 22.7 percent in March, while online sales jumped 18.4 percent, its eight consecutive month of double digit growth, according to MasterCard Advisors' SpendingPulse, which estimates total retail sales across all payment forms.
The strong figures bode well for US retail chains, including Gap, Saks and Target Corp, which are scheduled to report March same-store sales data on Thursday.
The jump in luxury spending was a contrast to March of 2009, when luxury sales fell 19.2 percent. In March 2009, e-commerce sales rose 10.8 percent.
'We're seeing a recovery, or continuing gains from a lot of sectors,' said Kamalesh Rao, director of economic research for MasterCard Advisors' Spending Pulse, which bases its data on aggregated sales activity in the MasterCard payments network, together with estimates for payment forms like cash and check.
Wall Street, on average, is expecting same-store sales to rise 6.2 percent in March, according to Thomson Reuters data, boosted by warm weather, an early Easter and an improving job market.
Strength in the teen apparel market, which was heavily battered during the economic downturn, also is expected to boost March sales numbers.
Consumers drastically cut back on spending during the recession as unemployment rose and lending slowed. Retailers selling non-essential products, rather than items like food or gasoline, felt the greatest pinch.
According to SpendingPulse, the apparel sector saw a 5.2 percent rise in sales during March, contrasting with a decline of 12.9 percent in the year-ago period.
'Spring shopping may be a bit more discretionary and we're seeing some willingness to spend a bit more and do a bit more discretionary spending,' said Rao.
Still, the data pointed to various sectors that remained weak, such as department store sales that fell 3.2 percent and sales within the auto repair and maintenance sector that fell 3.2 percent. MasterCard Advisors is the professional services arm of MasterCard Worldwide. - Reuters