E-commerce spending took a hit last month as more U.S. consumers are heading in-store to shop.
According to its latest SpendingPulse report, Mastercard said on Thursday that e-commerce sales were down 1.8% in April, while in-store sales were up 10% for the month. The credit card company said that California, New York, Florida, Nevada, and Illinois were among the states leading the charge back to brick-and-mortar.
This report comes on the same day as many e-commerce-focused retailers took a hit on Wall Street. Etsy shares dropped nearly 17% on Thursday on the news of the online marketplace issuing disappointing guidance for the second quarter. Shopify’s stock fell nearly 15% the same day after it forecast that its revenue growth would be lower in the first half of the year. Farfetch and The RealReal also fell about 12% on Thursday, while Amazon fell 7%.
A week ago, Amazon gave the first glimpse of waning momentum for e-commerce retailers. Shares for the web-based retailer plunged 10% after the market closed last Thursday after reporting disappointing earnings for the first quarter of 2022.
The Seattle-based tech company reported a $3.8 billion net loss in the first quarter, compared to a net income of $8.1 billion in the same period last year. Amazon blamed the decline in part to due to a pre-tax valuation loss of $7.6 billion due to its investment in electric car company Rivian Automotive.
Overall though, Mastercard’s latest report – which is based on aggregate sales activity in the Mastercard payments network plus survey-based estimates for certain other payment forms – said that total retail sales increased 7.2% in April year-over-year and increased 15.3% compared to pre-pandemic spending in 2019.
And despite mounting inflationary challenges, Mastercard also said that consumers continued to spend on apparel, growing the category 10.8% year-over-year in April. Spending at department stores also increased last month by 15.7%, though rates have started to soften from the peaks earlier this year, Mastercard added.
This contrasts with a recent spring survey of consumers from the Footwear Distributors and Retailers of America released last month found that almost half (48%) of footwear consumers plan to spend less on shoes this spring than last year.
The survey, which was conducted by Emerson College Polling in partnership with the Fashion Footwear Association of New York (FFANY), also found that 49% of shoe shoppers are putting off footwear purchases because of inflation.