By Romy Ribitzky
June 3, 2011
The month of May isn’t traditionally a good one for retailers, and this one wasn’t an exception, as many chains open for at least one year reported muted sales. Bad weather and rising concern over volatile energy prices kept consumers at home.
It didn’t help that the Easter holiday fell in April this year and that Mother’s Day was a lackluster gift-giving holiday with mom not getting expensive gifts overall.
Of 24 retailers, about 60 percent missed expectations and 40 percent beat expectations, according to a poll by Thomson Reuters.
Even typical trend-bucker Target felt some weakness. “Our guests continue to shop cautiously in light of higher energy costs and inflationary pressures on their household budgets,” Target’s CEO Gregg Steinhafel told the Associated Press.
However, at the other end of the spectrum, high-end luxury sales, jewelry, and e-commerce enjoyed strong growth in May, as did the hotel and restaurant industries, according to the MasterCard Advisors SpendingPulse report, a monthly macroeconomic indicator that measures national retail sales per sector.
But perhaps the best standout continues to be e-commerce. Now in its 22nd month in positive territory, and posting its seventh month of double-digit gains at 15.9 percent, e-commerce sectors continue to dominate across the board says Michael McNamara, Vice President, Research and Analysis for MasterCard Advisors SpendingPulse in a statement.
Luxury-hungry Millennials may be driving that growth, finds the latest report from the New York-based Luxury Institute. “Wealthy Americans 35 years of age and younger are avid consumers of a wide range of new media on smartphones and tablet computers,” according to the report. “Seventy-percent own smartphones (40 percent iPhone, 24 percent BlackBerry) and 23 percent already have an Apple iPad.” Their tendency to use their tech toys to make purchases on the go is likely to only continue driving up e-commerce sales. And once mobile payment platforms truly become integrated into mainstream retail, expect Millennials to largely dominate how—and where—retailers spend their ad dollars.