Market Developments

Spending: electronics, appliances up; apparel down

Nov 14, 2011

Purchase, N.Y.--The latest SpendingPulse data from MasterCard Advisors shows that retail momentum carried over from September into October but that what consumers were buying changed.

Sales of apparel rose in the mid-single digits when compared to October 2010 but has slowed considerably since September, the data shows. Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse, said apparel sales began to pick up last October, making for higher comps. In addition, the unusual snowstorm that hit the Northeast on the last Saturday of October might have pushed some spending into November.

While growth in apparel sales slowed, spending on electronics and appliances picked up, the first positive month for the category since March and its highest growth since September 2010. While typically there are a lot of releases (new games, products, etc.) in the third quarter, this year that was pushed back into the fourth quarter. That could account for some of the increase in electronics spending in October, according to an analysis of the data.

Overall, MasterCard Advisors notes that October normally represents a “lull” in the retail world, a month stuck between back-to-school shopping and the holidays. The month’s most significant shopping event is Halloween. This year, the Halloween-related sectors, including drug stores, gift and novelty stores, and grocery stores saw sales rise 5 percent year-over-year, with higher food prices contributing to the gain.

High unemployment and consumer confidence are still factors that are slowing spending. However, the SpendingPulse Price Index is not showing much evidence of discounting, a trend that could be attributable to the rising cost of raw materials.

MasterCard Advisors SpendingPulse is a macroeconomic report that tracks national retail and service sales, estimating for total U.S. retail sales across all payment forms, including cash and check.

 

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