The eCommerce train is showing now signs of slowing down, the latest Mastercard SpendingPulse data released Thursday (Feb. 10) showed.
This as digital sales jumped 10.4% in January compared to a year ago, and grew significantly faster than the total U.S. retail sales estimate of 7.2%.
Compared to pre-pandemic level, Mastercard’s digital commerce data showed sales were up 110% versus January 2019 levels.
“Coming on the heels of the holidays, January typically marks a month of returns and exchanges,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, in a statement.
“However, the strong growth across sectors reflects the optimism and eagerness for the year ahead,” he added, noting that nearly all sectors were up, reflecting what he said looked to be consumers “returning to their shopping habits with a continued emphasis on digital.”
Apparel, Luxury and Services
Another finding from SpendingPulse found that apparel sales were up 37.6% year over year for January, the strongest growth in SpendingPulse history. Clothing has been a popular good for consumers lately as consumers go back to the office, or begin to attend social events. Growth has been consistent for 11 months.
Department stores have also gained with January sales up 10.5%, year-over-year, and 9.8% when compared to pre-pandemic levels.
Luxury items saw a 45.3% jump and jewelry sales were up 18.8%, both over the year as Valentine’s Day approaches.
As mask mandates are starting to fade, even in the strictest areas of the country, there has been increased spending on services, as opposed to goods. As expected, there has been a significant increase in in-person activities that make up services. Restaurant sales are up 36.7% over the year, while it was 16.6% for the entirety of 2021.
A Buying Trend
The Mastercard report comes just one week after results from eCommerce giant Amazon showed that its Q4 earnings net sales grew 10% to $137.4 billion. Furthermore, the company said it was welcoming “millions” of new Prime members and was also seeing higher renewal rates worldwide.
Those results, combined with its confidence in the consumer, saw the Seattle-based retailer raise its Prime annual membership by $20 to $139.
“Despite lapping 2020’s extraordinary sales growth, we continue to see an increase in customer demand and sales during the remainder of 2021, even as the economy opened back up,” Amazon Chief Financial Officer Brian Olsavsky said during the earnings call.
To be sure, the 7.2% overall increase shown in the Spending Pulse data is sharply higher than the 1.7% gain economists are expecting next Wednesday (Feb. 16) when the Commerce Department releases its tally for January retail sales.
The following day, retail giant Walmart will report its Q4 and full year earnings before markets open on Feb. 17. The Arkansas-based operator of over 4,000 U.S. stores last reported a year-over-year increase of 9.2% in comparable store sales in the pre-holiday third quarter.