SOURCE: SpendingPulse

November 23, 2008 18:30 ET

SpendingPulse 2008 Holiday Preseason Update: U.S. Retail Sales Continue to Struggle in the First Half of November; A Couple of Developments to Note

PURCHASE, NY--(Marketwire - November 23, 2008) - SpendingPulse, a macro-economic report tracking retail and service sales nationally, today provided summary results of pre-Black Friday shopping for the first half of November. Continuing a trend that started in September, retail sales continued to contract through November 15.

While the aggregate numbers over the initial two week preseason period are negative, Michael McNamara, Vice President of SpendingPulse, pointed to two developments. "First, gasoline prices are now 30% lower than they were at this time last year. Historically, when gas pumping increases, we have seen store traffic increase. Second, while sales were down significantly for the first half of November, most sectors did experience some improvements in sales during the second week of the month."

Even with these positive signs, many sectors of retail are heading into the Thanksgiving holiday with substantial sales challenges.

"Several retail industry categories continued to struggle through the first half of November," noted Michael McNamara, vice president of research and analysis for MasterCard Advisors. "Key holiday sectors posted year-over-year declines of over 19%."

SpendingPulse analyzed the Electronics, Specialty (Apparel), eCommerce and Luxury sectors. While all categories have been experiencing negative growth throughout the fall, in most sectors the rate of decline slowed during the second week of November. Here are the highlights:

Apparel

Overall specialty apparel was down 19% from last year, following drops of 5.5% in September and 12.2% in October.

Women's apparel experienced a severe decline of 19.7% in the first half of November, compared with 2007. "At least the rate of decline is steadying, after going from -.9% in August to -18.2% in October," commented Mr. McNamara.

While Men's Apparel had shown consistently better year-to-year comparisons than other sectors of Apparel through October, the first half of November showed a decline of 20.5% over 2007.

Electronics

Electronics and appliance sales had some of the steepest drops of the sectors. For the first two weeks of November, sales posted a year-to-year decline of 22.1%. Observed Mr. McNamara, "While this is obviously a notable negative year-to-year comparison, it is fairly comparable to the 19.9% decline in October, so at least we can report that the declines are not worsening."

Luxury

Like electronics, the luxury sales category is pegged to high ticket-price purchases, and like electronics, luxury showed a particularly sharp decline in sales, dropping 21.1% in the first two weeks of November against 2007, following a 20.1% year-to-year decline in October.

eCommerce

eCommerce showed the most modest declines of the sectors. For the first two weeks of November, eCommerce sales were down 7.5% compared with the first two weeks of November 2007.

SpendingPulse™ Data Source: SpendingPulse is an information service provided by MasterCard Advisors, a subsidiary of MasterCard Worldwide. 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 estimates for all other payment forms, including cash and check. SpendingPulse does not represent MasterCard financial performance.

About MasterCard Advisors

MasterCard Advisors, LLC, 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.

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