The economy has stabilized, but we are not in expansion mode. What was down is up and what was up is down now versus in late 2008 when the economy halted after Lehman Brothers collapsed. That’s good news for women’s apparel and luxury.
This is the view from MasterCard’s SpendingPulse, a controlled panel of retail activity in the U.S. that is available as a reporting service. The reports are based on credit card transactions and other data.
In late 2008, people stopped buying anything that cost more than $500, said Michael McNamara, vice president of MasterCard SpendingPulse. Furniture alone contracted about 20 percent. At the end of the first quarter last year, the economy stabilized. Now sales are generally positive, and the areas that are doing best are those that were previously hard-hit.
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A few relevant statistics:
• Apparel sales were up 0.6 percent in January.
• Luxury goods — defined as the top 10 percent of average ticket size in a category — were up 8.1 percent in January.
• Department stores were down 2.7 percent.
• Jewelry was up 3.5 percent.
• Electronics was up 9 percent.
• Furniture was up 1.5 percent.
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Meanwhile, previously strong categories such as gasoline, tires, auto repair and fast food are down.
Men’s clothing, hotels and airlines are generally positive.
“It’s the reverse of 2008,” he said. “Women’s apparel was hit really hard in this recession. Footwear held up pretty well.”
Even while the economy was plunging, the Internet continued to grow. Last year, 12 percent of all retail sales took place online.
“The durability in the shift from brick-and-mortar to online has been rather remarkable,” he said.
Most online spending takes place on weekdays, with Tuesday, Wednesday and Thursday the strongest days, because people shop at work. Conversely, they go to stores on weekends, usually in fair weather.
“January is an important month for the online channel” because of the cold weather and everyone is back at work.
Women’s apparel has been growing online. In 2006, the share of women’s apparel sold over the Internet was 8.3 percent. In 2009, it was 14 percent. “The trajectory here is very impressive,” he said.
That growth continues despite overall tepid performance in the category. In 2007, women’s apparel overall grew about 1 percent. But online, it grew 23 percent. Even with the recession, growth rates online were still in the double digits last year, he said.
“When gasoline prices went up, you had a lot of shoppers who tried the Internet for the first time,” he said.