Consumers still spending: February sales rise 8.7%

Soaring prices did not stop American consumers from spending in February.

U.S. consumer spending maintained positive momentum in February, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment.

Overall retail sales (excluding auto) in February increased 8.7% year-over-year and were up 17.3% compared to their pre-pandemic period (February 2019). This is slightly above January growth levels.

In-store sales increased 10% in February compared to the same month last year, and rose 8.0% versus pre-pandemic as consumers resumed in-person activity. The increase came amid the lifting of many COVID-19 restrictions and as consumers looked to refresh their wardrobes as they prepared to return to their offices after nearly two years working remotely. Another contributing factor cited by Mastercard were the winter storms that occurred in many areas of the country last February.

“Despite inflation, consumers are putting their record savings to work and expressing themselves through fashion again—much to the benefit of the apparel, department store, luxury and jewelry verticals, according to Mastercard SpendingPulse,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated.

E-commerce sales in February were up 4.4% year-over-year and 85.9% versus pre-pandemic, with the shift to digital remains a persistent “yet slowing trend,” according to Mastecard.

The elevated level of inflation is reflected in the February retail sales increases. Other key trends for the month are below.

• Apparel and department stores: Apparel (up 37.6% year-over-year and 34.3% pre-pandemic) and department store (up 26.3% year-over-year and 3.4% pre-pandemic) growth rates remained elevated for the month as consumers prepare to return to physical offices, updating their wardrobes.
• Furniture/home décor promotions: Furniture and furnishings sales spiked in February around the traditional President’s Day weekend, driving growth rates up 10.8% year-over-year and up 17.9% compared to pre-pandemic 2019 levels for the month.
• Restaurant resurgence: Restaurant sales, which rose 39% over the year-ago quarter and increased 24.2% over the pre-pandemic period, continued to outperform in February. Growth rates were in the 30- to 40% range across most states. 
• Jewelry sparkles:  Jewelry sales in February rose 22.4% year-over-year and were up 24.2% compared to the pre-pandemic period.

Mastercard SpendingPulse reports on national retail sales across all payment types in select markets around the world. The findings are 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 defines “U.S. retail sales” as sales at retailers and food services merchants of all sizes. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included.