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SpendingPulse July Retail Report: Sector Spending In Holding Pattern

PURCHASE, N.Y. - (BUSINESS WIRE) - MasterCard Advisors:

SpendingPulse
Data Source:		A macro-economic indicator, SpendingPulse reports on national retail and service sales and is 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. MasterCard SpendingPulse does not represent MasterCard financial performance. SpendingPulse is provided by MasterCard Advisors, the professional services arm of MasterCard Worldwide.

MasterCard Advisors' SpendingPulse, a macro-economic report tracking national retail and service sales, today provided summary results for performance of specific U.S. retail industries in July, 2010. This month, sales in most categories remained mostly flat compared to July 2009 in contrast to the sharper growth of Q1 and the more moderate growth of Q2, 2010.

Michael McNamara, Vice President, Research and Analysis for SpendingPulse, observes: "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. 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."

To watch a short video with additional commentary from Michael McNamara, please visit: http://www.mastercardadvisors.com/us/advisors/en/information_analytics/spendingpulse_podcast.html

On a positive note, eCommerce, 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. In terms of eCommerce sub-categories, Apparel eCommerce 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. Almost all of eCommerce sub-categories posted year-over-year growth, the exception being Department Stores, which was down by 1.9% following seven months of double-digit growth. Family Apparel was up a very robust 22.2% year over year.

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. Although no longer in negative territory, 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 to 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%. While some of the other housing-related sectors are down, the growth in Appliance sales is a positive sign.

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 to the strong June growth of 7.9%. Women's Apparel, Children's Apparel and Footwear all posted declines of 1% to 4%, with Children's posting its first decline in 10 consecutive months and Men's Apparel posting a sharp decline of 16.3%.

Impact of Oil Spill Disaster in the Gulf

SpendingPulse also examined a few specific industry sectors including the hotels and restaurants in specific markets along the Gulf including Biloxi, MS, Gulf Shores, AL, Pensacola, FL, Ft Walton Beach, FL and Panama City, FL.

Overall the spill seems to have had a severe impact on the local hotel sector while the local restaurant sector has not been hit as hard. Also the markets varied somewhat as Biloxi MS seemed to fare better, possibly because of the casino business in that market while areas that are more dependent on beach tourism were much harder hit.

Pre-oil spill hotel and lodging sales were showing year-over-year increases of 12.9%, while post spill, the sector showed year-over-year declines of 25.5%.

The restaurant sector demonstrated more resilience with the full service category generally flat compared to 2009, while the limited service sector posted growth.

While the economic impact on these local markets was in some cases severe, the spill does not seem to have had a noticeable impact on the aggregate national retail sales results.

For more on SpendingPulse, please visit: http://www.mastercardadvisors.com/us/advisors/en/merchant_solutions/ms_spendingpulse.html

About MasterCard Advisors

MasterCard Advisors provides payments consulting, information, analytics, and customized services to financial institutions and their merchant partners worldwide. Addressing complex challenges in strategy, marketing, risk, and operations, MasterCard Advisors helps clients maximize the value of their payments businesses. As the professional services arm of MasterCard Worldwide, MasterCard Advisors is uniquely qualified to provide clients with insights and solutions that drive tangible impact and financial gain. For more information, go to www.mastercardadvisors.com

About MasterCard Worldwide

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard, Maestro and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com. Follow us on Twitter: @mastercardnews.

Meir Kahtan Public Relations, LLC
Meir Kahtan, +1-212-575-8188
mkahtan@rcn.com
or
MasterCard Worldwide
Jennifer Stalzer, +1-914-249-5325
Jennifer_Stalzer@mastercard.com