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Retail Industry Updates

It Should be a Robust Retail Season for School Supplies

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School’s out for summer, but retailers are already thinking about the upcoming school season, which should see most all kids returning to the classroom.

Retailers are about a month out from the back-to-school supply season, which begins about July 15. According to Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, U.S. retail sales are expected to grow 5.5% (excluding automotive and gas) during the critical July 15 through Sept. 6 back-to-school period compared to the same time in 2020. Compared to 2019, sales are expected to grow 6.7%.

“Back to school has always been a prime season for retailers. This year, the broader reopening brings an exciting wave of optimism as children prepare for another school year, and the grown-ups in their lives approach a similar ‘return to office’ scenario,” said Steve Sadove, senior advisor for Purchase, N.Y.-based Mastercard and former CEO and chairman of Saks Incorporated. “This back-to-school season will be defined by choice as online sales remain robust, brick-and-mortar browsing regains momentum and strong promotions help retailers compete for shoppers’ wallets.”

As the broader U.S. reopening occurs and consumers return to brick-and-mortar stores, Mastercard said it anticipates e-commerce sales will ease slightly compared to last year (-6.6%) but will remain up a significant amount (+53.2%) when compared to 2019. In terms of what consumers are buying this back-to-school season, Mastercard expects the following retail trends:

• Apparel refresh: While “athleisure” was the fashion statement of 2020, this year brings the diversification of the wardrobe as in-person schooling, reunions and other events drive consumers to make their social debuts in style. Apparel is expected to grow 78.2% year over year and 11.3% year over two years.

• Department store shopping returns: Department stores, outdoor shopping centers and malls will definitely be busier. Mastercard forecasts a 25.3% year over year and 9.5% year over two years increase in the department store sector as they rebound from last year’s dip in foot traffic. Buy online, pick-up in store and contactless delivery will remain important as consumers continue to seek low-contact experiences.

• Tech upgrade: Mastercard anticipates electronics sales will increase 13.0% year over year and 9.6% year over two years.

Mastercard said the anticipated back-to-school sales growth is a continuation of ongoing retail sales momentum, with May marking the eighth consecutive month of retail sales growth. According to Mastercard SpendingPulse, U.S. retail sales, excluding automotive and gasoline, increased 12.2% in May when compared to May 2020 and 10.2% compared to May 2019. Online sales in May grew 1.1% and 94.8% compared to the same previous periods.

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