Mastercard: U.S. retail sales up 4.6% in February; apparel continues to move online

Consumers didn’t let inclement weather put that big of a dent in their spending during the month of February, particularly when it came to shopping online.

U.S. retail sales increased 4.6% year-over-year, according to MastercardSpending Pulse, which measures in-store and online retail sales across all forms of payment. (Mastercard’s data was adjusted to account for the leap year in 2020. Without seasonal adjustment the total retail sales growth would be +1%.) Online sales rose 54.7% compared to 2020.

“While in-store sales decelerated slightly as a result of winter storms, consumers are continuing to show up online,” said Steve Sadove, Mastercard senior advisor and former CEO of Saks, Inc. “From jewelry to apparel, e-commerce has opened doors for consumers to shop online while warmer days, widespread vaccinations and the loosening of restrictions appear on the horizon.”

The report revealed that apparel shopping continues to shift online. While apparel sales were down 5.3% overall, apparel e-commerce sales grew 47.3% year-over-year. In February, 73.9% of all apparel purchases were made online as compared to the year-ago period, where 47.5% purchased occurred online vs. in-store.

Other key national retail trends for February are below:
• Grocery Aisle Touchdown: With more people watching football’s big game from home, grocery spend was up 30% the three days prior. That contributed to the Grocery sector growing 12.4% year-over-year for the month.

• Love is in the Air—and in the Mail: As consumers shopped for Valentine’s Day, jewelry spend rose 5.9% and 63.1% online year-over-year. Restaurant spend remained down (-13.5%) but has showed improvement over the past two months.

• Cabin Fever Leads to Home Enhancements: Furniture and furnishings rose 8.6% continued to post solid gains, up 8.6%.  

• Stimulus Sales Lift Continued, though Fading: The infusion of stimulus payments in early January appeared to boost consumer spending in January and through early February, though the impacts have waned.

At the local level, the situation varied widely. A series of winter storms the week ending February 20 affected retail activity across the South—no state more than Texas. Mastercard SpendingPulse analysis shows how the extreme winter freeze impacted retail sales locally and at the national level.

On Feb. 17, Dallas, Austin and Houston all had year-over-year total retail sale declines of 35-50% as retail locations closed amid crippling cold. With Texas typically accounting for approximately 10% to 11% of U.S. retail sales volume, this widespread event pulled the national growth rate down 2.2% for the week.

Online sales activity also took a hit as power outages limited consumers’ ability to recharge phones and other devices. This lack of connectivity drove online sales in the region into negative territory for several days.

As the weather cleared, a wave of recovery spending with daily year-over-year rates exceeded 30% in markets such as Dallas, Austin and up to Nashville.