FINANCE

MasterCard Advisors: Q4 sales momentum continues into January

BY CSA STAFF

New York City — January saw strong growth across most retail categories, continuing the positive performance from fourth quarter 2010, albeit at a slightly slower pace, according to MasterCard Advisors SpendingPulse, a report on national retail and services sales that is based on aggregate sales activity in the MasterCard payments network and survey-based estimates for other payment forms, such as cash and check.

With the January closing of the retail year, sectors that were up for the year outnumbered those that were down by a ratio of three to one. However, even among those which were up for the year, about half have yet to reach their pre-recession peak levels of 2006 and 2007.

“A combination of rising consumer demand and strong pricing continued to drive retail sales in January,” said Michael McNamara, VP research and analysis for MasterCard Advisors SpendingPulse. “Although less robust, the trends we observed were similar to those recorded in the fourth quarter of 2010. Most sectors continued to post positive year-over-year results during the month despite consumers taking a pause in spending and repeated snow storms affecting the East Coast.”

In terms of sectors, January 2011 had notable strengths and weaknesses, according to MasterCard. Here are some specifics:

  • Posting their sixth consecutive month of positive year-over-year growth, total apparel sales continued to do well in January although at a slower growth rate than very robust fourth quarter 2010 rate. All sub-sectors of apparel posted solid year-over-year increases, the most notable of which came from the family (teen) and men’s categories, respectively increasing 12.8% and 8.1% year-over-year.
  • The electronics and appliances sector posted a year-over-year decline of 3.8% in January following a modest year-over-year increase recorded in December. The consumer electronics sub-category declined by 3.3% and the appliance sub-category fell sharply by 6.4%, its fourth consecutive year-over-year monthly decline.
  • E-commerce continued to gain share at a very steady rate, posting double digit year-over-year increases for the third consecutive month, growing 12%.
  • The SpendingPulse Luxury Index, which measures sales at high-end restaurants, food stores, department stores and general apparel categories, posted a strong year-over-year growth of 6.1%, the second highest growth rate since May 2010.
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Treasury Secretary takes a snow day from NWA

BY CSA STAFF

Friday was to be something of a special occasion in Northwest Arkansas, until extreme winter weather forced a change of plans. Word arrived yesterday that Treasury Secretary Tim Geithner would not be visiting the area as originally planned, but the visit was postponed rather than cancelled, and he would be rescheduling the visit. Originally, he was scheduled to meet with regional business leaders to discuss how government and the private sector can work together to out-innovate the competition and grow the economy, according to a Treasury press release. The agenda included a private round-table meeting with a group of undisclosed business leaders at the Arkansas World Trade Center followed by a visit to the manufacturing plant and labs of NanoMech, a small business that uses nanotechnology to manufacture products with broad applications, including machining and manufacturing, lubrication and energy, and biomedical implant coatings.

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January sales adds more uncertainty to Walmart’s Q4

BY CSA STAFF

Retail sales during January offered a mix bag of results and made it rather tricky to determine how much results were influenced by harsh winter weather, gift card redemption rates, a still shaky economic recovery and individual company strategies.

A 1.7% same store sales increase at Target was below the company’s expectations, yet chairman, president and CEO Gregg Steinhafel maintained that the company’s major remodeling effort to add fresh food to existing stores and a 5% rewards program were generating results in line with expectations. Exceeding estimates was Costco, which produced a 6% same-store sales gain at its U.S. clubs that was aided to the tune of 200 basis points by gas price inflation. A big winner during the month was Limited’s Victoria’s Secret division, which posted a 24% comp increase.

In other apparel sector news, Gap’s same-store sales in January rose 1%, Wet Seal reported a 6.2% gain, and comps at the Buckle rose 4.3%. Other notables included Hot Topic, up 3.3%, Zumiez, up 15%, Aeropostale, up 1%, and American Eagle, down 6%.

Dillard’s was the clear winner in the department store category in January, posting a same-store sales increase of 6%, while Macy’s was up 2.6%, Kohl’s was up 1.4%, and JCPenney declined 1.2%.

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