US Retail Sales, Excluding Automotive and Gasoline, Surged 4.6% YoY, Online Sales Up 54.7%, Mastercard Reports

Mastercard (NYSE:MA) reveals that February 2021 was yet another huge month for digital commerce, which increased 54.7% year-over-year (YOY).

Mastercard pointed out that despite the “inclement weather” felt across many parts of the country this past month, US retail sales (excluding automotive and gasoline) surged 4.6% YoY when adjusted for Leap Year, according to Mastercard SpendingPulseTM.

Mastercard further noted that online sales grew 54.7% compared to last year. The company’s SpendingPulse aims to measure in-store and online retail sales “across all forms of payment.”

At a national level, key retail trends from last month are as follows:

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% YOY for the month.”

Love is in the Air—and in the Mail: Also known for being the month of love, February “saw Jewelry spend rise +5.9% and +63.1% online YOY.” Restaurant spending “remained down (-13.5%) but has shown improvement over the past two months.”

Cabin Fever Leads to Home Enhancements: No big surprises here, as Furniture & Furnishings (+8.6%) “continued to post solid gains as seasonally cooler weather led to home improvements and décor projects.”

Apparel Shopping Continues to Shift Online: While Apparel sales “were down -5.3% overall, Apparel e-commerce sales grew +47.3% YOY.” This month, 73.9% of all Apparel purchases were “made online; a year ago, in February 2020, 47.5% were purchased online vs. in-store.”

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.”

Mastercard further noted:

“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 February 17, 2021, Dallas, Austin and Houston all had YoY total retail sale declines of between 35-50% as retail locations shut down due to the “crippling” cold. With Texas usually representing around 10% to 11% of US retail sales volume, this event “pulled the national growth rate down –2.2% for the week,” Mastercard revealed in its report.

Mastercard added that online sales activity also took a significant hit as power outages limited peoples’ ability to recharge their mobile phones and other electronic devices. This lack of connectivity “drove online sales in the region into negative territory for several days,” Mastercard confirmed.

But as the weather began to clear, a wave of “recovery spending” with daily YOY rates surpassed 30% in markets like Dallas, Austin and up to Nashville, the report noted.

Steve Sadove, Mastercard senior advisor and former CEO of Saks, Inc., stated:

 “While in-store sales decelerated slightly compared to last month as a result of winter storms, consumers are continuing to show up online. 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.”

Other major payment providers like Visa say they’re also committed to “maintaining stability” in our payments system and don’t intend to make future rate changes in the United States for another year so that the economy can recover (and people are better able to cope with the challenges).

As reported by Bloomberg, retailers have been asking Mastercard and Visa to postpone increases in interchange fees. This could help prevent a rise in costs for taking card payments at a time when consumers are really dependent on online shopping platforms.

Mastercard and Visa’s (NYSE:V) plans have caught the attention of Sen. Dick Durbin, the Illinois Democrat who had assisted with limiting fees on debit-card purchases.

Durbin noted in a recent letter to the card networks’ management (with US Representative Peter Welch, a Democrat from Vermont):

“We urge you to call off these planned fee increases. Our nation is still reeling from the ongoing pandemic.”

Mastercard’s management stated that it’s also planning to delay plans that could have led to physical stores (convenience stores and supermarkets) seeing considerably higher rates. The company said that it will “continue to be thoughtful” regarding the timing of introducing these changes.

Mastercard added:

“Mindful that some merchants are still facing unprecedented circumstances, we are delaying our previously announced interchange adjustments.”

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