Back-to-school sales are forecast to rise 7.5% compared to last year, according to Mastercard SpendingPulse.
The return to in-store shopping will help fuel sales during retailers’ second biggest selling season.
U.S. retail sales are expected to grow 7.5% (excluding automotive) year-over-year during the critical mid-July through Labor Day back-to-school period, according to Mastercard SpendingPulse, which tracks spending across all payment forms. Sales are anticipated to increase 18.3% compared to pre-pandemic 2019.
Department stores are expected to be a noteworthy back-to-school winner as the sector continues its recent rebound with 15 consecutive months of sustained growth, predicted Mastercard. The season is anticipated to drive the department store sector up 13% year-over-year and 27.3% compared to 2019.
Another winner will be physical retail as consumers return to stores to try on new sizes and browse the latest fashions in person. In-store shopping is expected to grow 8.2% year-over-year and 9.9% compared to 2019.
“Back-to-school is the second biggest season for retailers and is often looked at as an early indicator of retail momentum ahead of the traditional holiday season,” said Steve Sadove, senior advisor for Mastercard and former CEO and chairman of Saks Inc. “While Mastercard SpendingPulse anticipates growth across sectors, retailers will need to find innovative ways to entice shoppers as discretionary spending potentially stretches thin as a result of increasing prices.”
May sales Total U.S. retail sales (excluding automotive) increased 10.5% year-over-year in May, and 21.4% compared to pre-pandemic May 2019, according to Mastercard SpendingPulse. The increase outpaced year-over-year monthly growth experienced so far in 2022.
In-store sales were a key driver, up 13.4% year-over-year and 13.7% compared to pre-pandemic May 2019. E-commerce sales inched up 2.2%, but were up 99.1% compared to May 2019.
In other May year-over-year highlights:
• Apparel sales rose 17.4%
• Jewelry sales rose 22.2%;
• Department stores rose 12%;
• Grocery sales rose 13.8%;
• Electronic and appliance sales rose 5.9%; and
• Restaurant sales rose 17.5%.
“The continued retail sales momentum in May aligns with the sustained growth rates we’ve seen so far this year,” said Michelle Meyer, U.S. chief economist, Mastercard Economics Institute. “The consumer has been resilient, spending on goods and increasingly services as the economy continues to rebalance. That said, headwinds have become stronger - including gains in prices for necessities like gas and food, as well as higher interest rates."