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By Vaidik Trivedi|Source: www.paymentsdive.com, July 2021
Dive Brief:
- June 2021 was the ninth consecutive month of U.S. retail sales growth, excluding auto and gas expenses, as economic activities and spending picked up, according to a July 8 Mastercard report.
- The U.S. retail sales for the month of June not only exceeded sales last year but also surpassed pre-pandemic consumer spending. In June, retail sales grew by 11% year-over-over (YoY) compared to a 10.4% YoY increase from June 2019, according to the report.
- E-commerce sales have been increasing steadily since 2019 and skyrocketed last year due to the lockdown. Online sales grew by 8.3% YoY in June 2021 over last year and almost doubled, increasing 95%, compared to 2019, the report stated.
Dive Insight:
U.S. retail sales are experiencing a boom as consumers are slowly inching out of lockdown restrictions and unleashing their pent up demand. Some retail sectors like jewelry, department stores, restaurants and lodging experienced exponential growth over last year while other sectors remained stagnant.
Jewelry sales more than doubled compared to June 2020 volumes, and grew 59% compared to 2019. Restaurant sales for the month grew by 55% compared to June 2020 and have surpassed June 2019 sales volume by 17%, the Mastercard report stated.
The Mastercard report, which the card company publishes monthly, is based on sales activity through its card network and “survey-based estimates” for other payment forms, like cash and checks, the company says.
Restaurant employment is continuing on its recovery rate as the sector added 194,300 jobs in June 2021, and nearly one million jobs in the first of 2021, according to a July 7 report by National Restaurant Association. Despite adding jobs for six straight months, restaurants are “still nearly 1.3 million jobs, or 10%, below pre-pandemic employment levels,” the report stated.
During the pandemic, consumers pivoted to alternative modes of ordering food. Rather than dining in, they preferred ordering food for delivery or take out to starve off chances of contracting the virus.
Consumers and retailers alike pivoted towards the ‘buy-online-pickup-in-store’ (BOPIS) method of shopping. In the U.S., BOPIS has more than quadrupled since March 2020 among consumers and nearly 27% of merchants now offer BOPIS services, according to a recent Paypal and BigCommerce report.
Rebound of Travel
After a dismal 2020, the travel industry is picking up pace again with the lodging sector more than doubling sales volume in June 2021 compared to last year, the Mastercard report stated. However, lodging sales are still 2.5% below June 2019 levels.
Last month, the Transportation Security Authority (TSA) announced that it screened over two million passengers in a single day on June 11. Daily passenger levels hadn’t exceeded that marker since March 2020, the TSA said in the release. The number “represents 74% of travel volume versus the same day in 2019 and 1.5 million more travelers than the same day in 2020,” according to TSA.
“Consumers have a ton of money saved, interest rates are so low, and everybody is trying to take the trip that they couldn’t take last year,” said Fred Lalonde, who is CEO of Hopper, a travel booking and consulting app company that has also started offering financial services. “Leisure travel is in a supercycle and corporate travel, which is a big part of the travel industry, is slowly picking up pace again,” he said in an interview Thursday.
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