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Report: Spending in most retail sectors holds steady in July

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Purchase, N.Y. Sales in most categories in July remained mostly flat compared twith July 2009 in contrast to the sharper growth of the first quarter and the more moderate growth of second quarter 2010, according to MasterCard Advisors’ SpendingPulse.

“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,” said Michael McNamara, VP research and analysis for SpendingPulse. “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, e-commerce, 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. Apparel e-commerce increased in double digits for the eighth consecutive month, up by 13.7% in July on a year-over-year basis, but smaller than the growth rate of 18.6% posted in June.

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. 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 with 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%.

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. Notably, family apparel was the only sub-category that posted increases, growing 3.4 %, compared with the strong June growth of 7.9%.

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