Furniture and Food Sales Help Brighten the Commerce Outlook

E-commerce accounted for 22% of U.S. retail sales in April and May, up from 11% in 2019, according to a new Mastercard report, a spike that promises to help shape the post-pandemic world of commerce.

The payment card network’s latest SpendingPulse report found that even as retail sales were struggling to gain stability over the last few months, e-commerce sales increased 92.7% year-over-year in May, another signal about how consumer behavior has changed. “In April-May, more than $53 billion of incremental spending occurred on e-commerce channels in the U.S.” Mastercard said. “This comparison is based on the typical e-commerce growth rate and e-commerce sales for the same period in 2019.”

The new report also gives more evidence about the gains that food retail in the U.S. has made during the COVID-19 outbreak. “In the U.S., demand for groceries remains elevated, with sales up 9.2 percent year-over-year in May across online and in-store,” the report said. “This is the strongest grocery sales volume for the month of May in SpendingPulse history.”

More broadly, “consumer spending appears to be normalizing in a number of markets,” the report said. Even, certain types of products and purchases did better than others, another reflection of recent changes in consumer buying behavior during lockdowns and stay-at-home mandates. “In May, U.S. hardware sales across online and in-store were up 36.2 percent compared to 2019. In addition, furniture sales grew 7.5 percent year-over-year in May, the strongest growth rate for the sector since August 2018.”

As retailers look to the second half of 2020, it remains unclear what the back-to-school and holiday shopping seasons will bring though some trends are gaining clarity, at least according to this latest report on U.S. retail spending.

“The shift to digital ways of shopping has been undeniable, while everything else has been incredibly unpredictable,” said Steve Sadove, Mastercard senior advisor and also a former CEO of Saks. “The question is what changes will stick around for the long-term. Investing in your home and shopping local are two recent trends. Heightened demand for touchless services is another, which could have tremendous impact on what stores actually look like and how they blend their online and brick and mortar footprints.”