Retail Sales, Especially E-Commerce, Surged In January

Despite the impact of the coronavirus' omicron variant and an elevated inflation rate, consumers are out spending. Overall retail sales were up 7.2% in January compared with the same month last year, according to the latest Mastercard SpendingPulse report, which measures in-store and online retail sales across all forms of payment. Compared with January 2019, total retail sales were up 22.1%.

E-commerce sales outpaced overall sales for the month, up 10.4% compared with last year, and more than doubling compared with January 2019, up 110.1%.

Consumer behavior at the beginning of 2022 was buoyed by pent-up demand, wage growth and the continued reopening of the experience economy, Mastercard notes.

A wide variety of retailers benefited. For example, department stores, which have seen sales dwindle for many years now, enjoyed a 10.5% gain year-over-year in January. 

Yet most other kinds of retailers did even better. Apparel sales grew 37.6% compared with last year, while luxury goods (except for jewelry) experienced a whopping 45.3% increase over the year. Jewelry sales were up 19.8%.

Grocery stores, which did very well on the whole during the pandemic, saw a more modest 11% gain in sales compared with last year, while restaurant sales grew 36.7% year-over-year as people returned to dining out.

“The strong growth across sectors reflects the optimism and eagerness for the year ahead,” Steve Sadove, a senior adviser for Mastercard and former CEO and chairman of Saks Inc., said in a statement. “With nearly all sectors up, we see consumers returning to their shopping habits with a continued emphasis on digital.”

Retail sales estimates for January by the Bureau of Labor Statistics will not be released until Feb. 16. Last month, the BLS reported that retail sales in December 2021 were up 16.9% compared with December 2020.

Also according to the BLS, e-commerce sales increased 6.6% during the third quarter of 2021 compared with the same quarter in 2020, while total retail sales increased 13.1% in the same period.

E-commerce sales in Q3 2021 accounted for 13% of total retail sales. That is a drop from the early days of the pandemic but is continuing the long-term trend of gobbling up market share. Ten years ago, online sales made up 5% of total retail transactions, and five years ago, it accounted for about 8%.