SOURCE: MasterCard Advisors

December 14, 2008 18:30 ET

SpendingPulse 2008 Holiday Midseason Update: U.S. Retail Sales Settle Into Steady Double Digit Declines Across Most Sectors; a Few Bright Signs Uncovered in a Challenging Environment

PURCHASE, NY--(Marketwire - December 14, 2008) - SpendingPulse, a macro-economic report tracking retail and service sales nationally, today provided summary results for the holiday shopping season through the first week of December (November 2 - December 6, 2008).

Michael McNamara, Vice President of SpendingPulse, pointed to three pieces of good news: relative strength in eCommerce sales and the general merchandise sector (retailers that sell food), and a rise in gasoline pumping, responding to the dramatic fall in the price per gallon. "The last time the average price was below $1.70 was in 2004, and when gas pumping increases, historically we have seen an increase in store traffic." Still, several sectors are facing a challenging environment even after the Black Friday lift.

Recapping November, U.S. retail industry sales struggled through the first half of the month, posting year-to-year declines of over 19% in several key holiday sectors. While all categories had been experiencing negative growth throughout the fall, in most sectors the rate of decline slowed by the second week of November. Shopping and spending increased during Black Friday, with sales then settling back to the 15%-25% declines of mid-November.

SpendingPulse analyzed the Electronics, Specialty (Apparel), eCommerce and Luxury sectors. Here are the midseason highlights:


eCommerce sales are showing significantly better year-over-year comparisons relative to other areas of retail, posting a gain for the week after Thanksgiving of 10.4% over last year. "While some of this was due to the calendar shift, it is still a noteworthy increase," observed Mr. McNamara. For the season to date, eCommerce sales declined by only 4.8% compared to November through the first week of December 2007, a sign of relative strength compared to other retail sectors.


Overall specialty apparel was down 19.5% through the first week of December from last year, comparable to the decline of 19% in the first half of November.

Women's apparel declined by 21.3% over last year, while the first week after Black Friday the decline was 21.4% compared to the same week in 2007.

Men's Apparel has been somewhat more volatile, with a year-over-year drop of 16.1% for the season, but a 19.1% decline for the week following Black Friday. "While the men's category did not come down as quickly as the women's category," said Mr. McNamara, "the latest information indicates that the performance gap between the two sub categories has closed."

Footwear continues to show relative strength within apparel, with a drop of 13.2% for the season so far over 2007, and the average price of a footwear transaction actually rose by 1.9% over last year in November.


Electronics and appliance sales continued to show steep declines with a drop of 25% compared to the first week of December 2007.


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 27.8% through the first week in December, with a 33% decline for the week after Black Friday. Mr. McNamara noted that historically the Luxury category has relied on the last 10 days before Christmas for much of the holiday sales. "We will have to watch this sector carefully over the next two weeks."

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

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