In-store spending in June rose 11.7%, while e-commerce sales grew by 1.1% compared to last year
The latest Mastercard’s SpendingPulse survey revealed that U.S. online and in-store retail sales, excluding automotive, rose 9.5% on a YoY basis. Amidst the rising inflation, consumers spent more on necessities such as food and fuel. Excluding auto and gas, retail sales jumped 6.1%.
Notably, brick-and-mortar store shopping has not lost its popularity. In-store spending in June rose 11.7% compared to a much slower 1.1% rate of e-commerce sales growth. Nevertheless, e-commerce spending was still almost double its pre-pandemic (June 2019) level, the card company said.
Unlike some government data, the survey isn’t adjusted for inflation. For instance, the Bureau of Economic Analysis (BEA) registered only 0.2% of consumer spending growth in May and a 0.9% rise a month earlier.
Meanwhile, inflation has propelled consumer prices. CPI surged 8.6% from May 2021 to May 2022, according to the Bureau of Labor Statistics. That’s the biggest increase registered since December 1981. Therefore, the US government made taming inflation its highest priority, adjusting interest rates by 0.75%.
The impact of inflation on essential and discretionary consumer spending differs. As per Mastercard data,
- cost of fuel and convenience-store items increased by 42%
- groceries rose by 14%
- jewellery prices went up 16.2%
- luxury merchandise – 4%
- furniture and furnishings – 4.2%
Despite all the economic hardships, travel sectors such as airlines and lodging continue to exhibit strong demand. Namely, airline spending rose 18.2% in June on a year-over-year basis while lodging gained 33.7%.