CORRECTING and REPLACING PHOTO Mastercard SpendingPulse: U.S. Consumers Continued to Spend in July While Navigating High Inflation
August 04 2022 - 6:53PM
Business Wire
E-commerce growth sees a hot July amid promotional events, while
home-focused spending cools
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Mastercard SpendingPulse - U.S. Retail
Snapshot, July 2022 (Photo: Business Wire)
The release reads:
MASTERCARD SPENDINGPULSE: U.S. CONSUMERS
CONTINUED TO SPEND IN JULY WHILE NAVIGATING HIGH INFLATION
E-commerce growth sees a hot July amid promotional events, while
home-focused spending cools
According to Mastercard SpendingPulseTM, which measures in-store
and online retail sales across all forms of payment, U.S. retail
spending excluding automotive increased +11.2% year-over-year in
July, while retail sales excluding automotive and gas rose +9.0%.
Notably, e-commerce sales were up 11.7% YOY, a sharp increase after
months of softer growth. Rising prices—particularly for necessities
such as food and fuel—were a contributing factor, as Mastercard
SpendingPulse reflects nominal spending and is not adjusted for
inflation.
Spending increases in July outpaced monthly year-over-year
growth experienced thus far in 2022, with demand and higher prices
both contributing factors. Of note:
- Consumers continue to spend, with inflation’s impact varying
across sectors: Consumers continue to navigate high inflation
as they spend on wants and needs. The Grocery sector, for instance,
saw sales up +16.8% YOY in July due primarily to food price
increases. On the other hand, Apparel (+16.6%) and Jewelry (+18.6%)
sales saw strong demand-driven year-over-year growth, well
outpacing sector-specific inflation.
- E-commerce sales climb amid major promotional events:
While in-store sales remain elevated, up +11.1% YOY/ +13.9% YO3Y,
e-commerce posted its first month of double-digit sales growth
(+11.7% YOY) since December. E-commerce is up nearly double
pre-pandemic levels (+98.5% YO3Y). Online sales have ticked up
since the beginning of June, though July’s major promotional events
helped entice shoppers to splurge (and save) with online
deals.
- High season for vacation, with road-trippers seeing some
relief at the pump: Travel remains a priority, with Lodging up
+29.6% YOY and Airline sales up+13.3% YOY. Fuel & Convenience
spending remains elevated (+32.3% YOY / +47.1% YO3Y), though the
growth rate is down compared to June – reflecting price declines at
the pump.
“The latest retail trends place an emphasis on consumer choice
and passion driven spending – they’re hunting for deals, shopping
across channels and ultimately still spending on experiences and
goods that make them feel good,” said Steve Sadove, senior advisor
for Mastercard and former CEO and Chairman of Saks Incorporated.
“As retailers grapple with excess inventory and supply chain
constraints, it’s likely that the promotional activity seen in July
will continue to be an important strategy for retailers.”
Mastercard Economics Institute: Housing market cooldown slows
sales of home-related goods
After heating up during the pandemic, the U.S. housing market
has cooled considerably since the beginning of 2022, influencing
consumer spending on home-related goods. Each time a home changes
hands, there is usually a significant amount of spending as
consumers outfit their new abode. But with significant interest
rate hikes resulting in fewer homes sold, this has been translating
to a natural decline in home-related purchases, as reflected in
this month’s SpendingPulse. Sales growth for the Home Improvement
(+2.9%) and Furniture & Furnishings sectors (+5.0%) has
slowed.
“Consumers’ purchasing power has been strained by higher prices,
particularly for the most fundamental needs-based categories like
food and energy,” said Michelle Meyer, U.S. chief economist,
Mastercard Economics Institute. “Thus far, nominal spending remains
strong as consumers cope with high price inflation. As we continue
to look at the strength of the consumer, we will be keenly focused
on trends surrounding employment and wage growth.”
For additional insights about today’s housing trends and the
economic impact across the country, see the Mastercard Economic
Institute’s latest findings in A View on
US Housing: Today and Tomorrow.
About Mastercard SpendingPulse Mastercard SpendingPulse™
reports on national retail sales across all payment types in select
markets around the world. The findings are based on aggregate sales
activity in the Mastercard payments network, coupled with
survey-based estimates for certain other payment forms, such as
cash and check. As such, SpendingPulse™ insights do not in any way
contain, reflect or relate to actual Mastercard operational or
financial performance, or specific payment-card-issuer data.
Mastercard SpendingPulse defines “U.S. retail sales” as sales at
retailers and food services merchants of all sizes. Sales activity
within the services sector (for example, travel services such as
airlines and lodging) are not included.
About Mastercard (NYSE: MA) Mastercard is a global
technology company in the payments industry. Our mission is to
connect and power an inclusive, digital economy that benefits
everyone, everywhere by making transactions safe, simple, smart and
accessible. Using secure data and networks, partnerships and
passion, our innovations and solutions help individuals, financial
institutions, governments and businesses realize their greatest
potential. Our decency quotient, or DQ, drives our culture and
everything we do inside and outside of our company. With
connections across more than 210 countries and territories, we are
building a sustainable world that unlocks priceless possibilities
for all. www.mastercard.com
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Alexandria Pierroz, Mastercard +1 (914) 260-1020 |
Alexandria.Pierroz@mastercard.com
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