Back-to-School U.S. Retail Sales Expected to Grow 5.5%, Compared to Last Year, According to Mastercard SpendingPulse

The FINANCIAL– Anticipated growth builds on positive retail momentum, as total retail sales rose 12%* year-over-year in May, fueled by pent-up demand and reopenings, Mastercard notes.

As students wrap up the current school year, retailers – and parents – are already preparing for a robust back-to-school shopping season as more kids head back into the classroom. According to Mastercard SpendingPulse™, which measures in-store and online retail sales across all forms of payment, U.S. retail sales are expected to grow 5.5% excluding automotive and gas during the critical July 15 through September 6 back-to-school period compared to 2020. Compared to 2019, sales are expected to grow 6.7%.

“Back to school has always been a prime season for retailers. This year, the broader reopening brings an exciting wave of optimism as children prepare for another school year, and the grown-ups in their lives approach a similar ‘return to office’ scenario,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. “This back-to-school season will be defined by choice as online sales remain robust, brick and mortar browsing regains momentum and strong promotions help retailers compete for shoppers’ wallets.”

Anticipated Back-to-School Retail Sales  
 Anticipated YOY Growth
2021 (July 15-September 6) vs. 2020 (July 16-September 7)
Anticipated YO2Y Growth
2021 (July 15-September 6) vs.  2019 (July 13-September 4)
Total retail (ex. auto and gas)+5.5%+6.7%
Total retail (ex. auto)+10.0%+9.1%
E-commerce sales-6.6%+53.2%
Apparel+78.2%+11.3%
Electronics+13.0%+9.6%
Department Stores+25.3%+9.5%

Source: Mastercard SpendingPulse, which measures overall retail sales across all payment types, including cash and check

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Sector-Level Back-to-School Trends.

As the broader U.S. reopening occurs and consumers return to brick and mortar, we anticipate e-commerce sales will ease slightly compared to last year (-6.6%) but will remain up a significant amount (+53.2%) when compared to 2019. In terms of what consumers are buying this back-to-school season, we anticipate the following retail trends:

Apparel Refresh: While athleisure was the fashion statement of 2020, this year brings the diversification of the wardrobe as in-person schooling, reunions and other events drive consumers to make their social debuts in style. Apparel is expected to grow 78.2% YOY / 11.3% YO2Y.
Department Store Shopping Returns: Department Stores, outdoor shopping centers and malls offer a fresh change of scenery for shoppers. We forecast a 25.3% YOY / 9.5% YO2Y increase in the Department Store sector as they rebound from last year’s dip in foot traffic. Buy online, pick-up in store as well as technologies such as contactless will remain important as consumers continue to seek low-contact experiences.

Tech Upgrade: If we learned one thing this past year, it’s that technology keeps us connected. With many states and schools determining the virtual/in-person cadence, we anticipate Electronics will be up 13.0% YOY / 9.6% YO2Y.

Building on Ongoing Retail Momentum

The anticipated back-to-school sales growth is a continuation of ongoing retail sales momentum, with May marking the eighth consecutive month of Total Retail Sales growth*. According to Mastercard SpendingPulse, U.S. retail sales excluding automotive and gasoline, increased 12.2% year-over-year in May, and 10.2% compared to May 2019. Online sales in May grew 1.1% and 94.8% respectively, compared to the same periods.

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Mastercard SpendingPulseTM
U.S. Snapshot – May 2021
  
 Sales Growth 
May 2021 vs. 2020
Sales Growth 
May 2021 vs. 2019
Total Retail Sales (ex. Auto & Gas)+12.2%+10.2%
Total Retail Sales (ex. Auto & Gas)+16.4%+9.9%
E-Commerce Sales+1.1%+94.8%
By Sector  
Apparel+75.9%+14.7%
Department Stores+212.0%+4.2%
Furniture & Furnishings+22.5%+20.2%
Grocery+4.8%+14.4%
Jewelry+203.4%+44.7%
Lodging+254.4%-1.5%
Restaurants+84.7%+7.9%

Source: Mastercard SpendingPulse, which measures overall retail sales across all payment types, including cash and check

 

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