Retail Sales Up 9.2% in January, Hardware Shows Biggest Gain

Buoyed by the promise of new stimulus checks and the release of pent-up demand, retail posted impressive sales growth of 9.2% in January, excluding auto, gasoline, travel and lodging, according to the latest figures from MasterCard SpendingPulse.

Not surprisingly, ecommerce continued to skyrocket, gaining 62% vs. January 2019, shortly before pandemic lockdowns, MasterCard reported.

When the March figures are released, it will be interesting to see what kind of disparity there is from 2020 in terms of ecommerce sales, as the huge digital shift was underway twelve months prior.

Hardware sales saw the fastest growth in January, according to MasterCard, increasing 18.8% as home improvement overall is enjoying a boom time, while apparel continues to struggle, dropping 4.3% as the only losing category.

On the bright side for apparel, the January decline was the smallest since March 2020, when lockdowns began affecting retail sales. Specialty apparel, on the other hand, had a very strong January, with sales increasing 52.5%.

Right behind hardware was the furniture and furnishings category, gaining 16.6% as consumers continued to invest in their living spaces with so much more time spend there for work and children’s education.

Other categories called out in MasterCard’s report were grocery (up 5.9%), jewelry (up 3.3%) and electronics and appliances (up 0.7%).

Department stores, which have been hit particularly hard in the past year leading to thousands of door closures, saw their first gain since March 2020, with sales up 1.5% vs. January 2020. They have been reporting increased foot traffic in recent months and had a decent holiday season.

There was more good news for stores from foot traffic intelligence firm Placer.ai. According to its latest data, several store-based chains are off to a hot start in 2021 at least in terms of visitors, including Target, Best Buy, HomeGoods, Michaels and T.J. Maxx.

“While not all of them are beating their average foot traffic numbers from the second half of 2020, they’re all trending in the right direction — and one is outperforming the others by a wide margin,” Placer.ai said in its most recent report.

For example, Target and Best Buy saw average foot traffic up 0.6% and 1.5% in January, respectively. This reversed a trend in the second half of 2020, when Target (-1.5%) and Best Buy (-10.2%) both saw their numbers drop.

While Ulta Beauty is still struggling in terms of foot traffic, down 5.5% in January, it’s a marked improvement from November, when it was off 15.6%, Placer.ai reported.

Echoing the strong trend in furniture and home furnishings reported by MasterCard, Placer.ai said HomeGoods had far and away the strongest January in terms of foot traffic, up 25.2% year-over-year.

“The ability of HomeGoods to tap into two of the biggest trends driving the wider retail space – a focus on high value and home furnishings” drove the January gains, Placer.ai reported. “This is an astounding number that surpassed the strength the brand has already shown in late 2020.” Its foot traffic reports are based on anonymized location data from a panel of 30 million devices, creating estimates using AI and machine learning.

Mastercard’s SpendingPulse reports on national retail sales across all payment types in select markets around the world. It includes food services but excludes travel and lodging. The findings are based on aggregate sales in its payments network, along with survey-based estimates for other payment forms, such as cash and check.