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Consumers ‘Resilient’

Back-to-School Tech Sales to Rise 17.6% vs. Pre-Pandemic: Mastercard

U.S. electronics and appliances retail sales are projected to grow 5.9% year over year in the back-to-school period July 14-Sept. 5, reported Mastercard’s SpendingPulse service Tuesday. It forecast 17.6% sales growth in the electronics sector compared with the same pre-COVID-19 pandemic period in 2019.

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Overall retail sales are expected to grow 7.5% in the back-to-school period, excluding automotive, compared with 2021, said Mastercard. Sales are anticipated to be up 18.3% compared with pre-pandemic 2019, with department stores expected to be a standout winner as the sector continues its recent rebound, it said. SpendingPulse measures in-store and online retail sales across all forms of payment, not adjusted for inflation, it said.

Though inflation is affecting retail sectors and U.S. homes “in a myriad of ways,” persistent consumer demand “contributed to double-digit growth across nearly all retail sectors in May,” said Mastercard. “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, Mastercard senior adviser. Though SpendingPulse anticipates growth across retail sectors, “retailers will need to find innovative ways to entice shoppers as discretionary spending potentially stretches thin as a result of increasing prices,” he said.

SpendingPulse estimates total U.S. retail sales, excluding automotive, increased 10.5% year over year in May, and 21.4% compared with May 2019. This is outpacing year-over-year monthly growth experienced thus far in 2022, it said. In-store sales were a key driver, up 13.7% compared with pre-pandemic levels.

E-commerce sales in the back-to-school period are projected to grow 4.3% year over year and 89.3% compared with 2019, said Mastercard. It forecast an 8.2% increase in in-store sales year over year, and a 9.9% jump from 2019's back-to-school period.

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.”