MasterCard Advisors’ SpendingPulse, a macro-economic report tracking retail sales, today revealed the trend for retail is steady growth, particularly in North America and the UK.
The US posted an August growth rate of 4.1% over last year – continuing the healthy growth rates seen over the summer, and it maintains a healthy outlook going into the 4th Quarter. The UK and Canada grew by 4.0% year-on-year in August after a mild slowdown in July.
While North America and UK have posted consistently modest growth, South American and Asian sales have been much more fragile. In Hong Kong for instance, August retail data shows 1.6% growth year-on-year, the first positive growth rate in the last four months as they have been adversely affected by a slowdown in spending on mainland China. Taking Brazil’s subdued growth into account, August’s 2.3% rise on last year’s sales was an improvement. However, the economic environment in both Hong Kong and Brazil faces a number of challenges which could lead to a further slowdown in the coming months.
E-commerce retail sales growth remains strong – growing double digits in the US, Canada and the UK over last year.
The consistency in general US retail growth can be seen even in weekly and daily data. Although modest, this continued acceleration suggests that the momentum of the past couple of months may continue for a while. August retail sales in the US grew in most sectors, particularly lodging, electronics, and furniture as experiential spending continues to dominate for the consumer.
In the UK, after several years of weak growth, retail sales have shown a remarkable turnaround in 2014, with growth rates running at nearly twice the pace notched in 2011-2013. This reflects continued improvements to the UK economy. August’s growth was led by increased sales from furniture, apparel and grocery and department stores.
Sarah Quinlan, group head and senior vice president at MasterCard Advisors, said: “Our data illustrates that that globally, retail sales are more or less heading out of the doldrums. While some Asian and South American markets are facing more challenging economic environments, August has shown positive growth across the board which is a good sign. North America and the UK look particularly solid in their growth and so our data suggests this is a trend that looks set to continue, especially into the critical holiday shopping season.”