U.S. retail spending held onto gains in March in spite of higher gas prices and a later Easter, providing some reassurance that consumers are still spending, according to a report released Wednesday.
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MasterCard Advisors’ SpendingPulse — a report that tracks retail spending — showed that most retail sectors experienced year-over-year growth, but the rate of growth slowed due to a late Easter and concerns about rising gas prices.
“The growth rate came down in March, but it didn’t come down as much as we thought it would,” said Michael McNamara, vice president for research and analysis for SpendingPulse.
While rising gas prices have resulted in some changes in consumer behavior — such as driving less and making fewer trips to brick-and-mortar locations — that does not appear to have affected discretionary spending just yet, said McNamara.
“The overall spending — it doesn’t look as though higher gas prices are having too much of a negative impact,” he said.
What’s more, some areas of retail spending — like e-commerce — can benefit from rising gas prices, he added. And in fact online sales continued to show double-digit growth, rising 16.1 percent, the highest rate seen since December 2010. March was the sector’s fifth consecutive month of double-digit growth.
“Internet sales and some retailers are getting some reprieve,” he said.
Sales of luxury items — including high-end apparel, department stores, food stores and restaurants, but not jewelry — also grew 8.5 percent compared to March of 2010.
McNamara said the luxury sector tends to track trends in the financial market. "When you see the stock market do well that sends a positive echo through luxury retail," he said.
SpendingPulse's findings showed that with Easter arriving later (April 24th), April might get a boost in sales. According to McNamara, the 10 to 14 days prior to Easter are key shopping days for kicking off the spring shopping season.
“Easter tends to stimulate the spring shopping season,” said McNamara. “For different industry sectors it’s more important — apparel, food, travel, gas and hotels, flowers, candy and that kind of stuff.”
Apparel sales posted gains, with total apparel sales increasing by 4.4 percent. The report noted March's growth is approximately half of the average growth between September 2010 and February 2011.
Sales of children's wear stayed above 10 percent. The women's category was in the 6-7 percent range, while men's apparel segment was 1.4 percent in March, compared to 7.4 percent in February. Meanwhile, footwear sales declined 1.6 percent.
On Wednesday and Thursday, investors will get an insight into how many of the individual retailers performed during March when they issue their monthly same store sales reports.
On average, analysts are expecting March sales at stores open for at least a year to post a 0.7 percent decline, compared to March 2010's 9 percent growth, according to the Same Store Sales Index from Thomson Reuters.
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