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Small Stores’ Momentum Continues

Small retailers in August continued their now yearlong run of superior sales results.

Small retailers in August continued their now yearlong run of superior sales results.

According to the monthly SpendingPulse for Small Business survey, conducted by MasterCard Advisors in tandem with Wells Fargo, smaller retailers saw their sales escalate 6.8 percent last month, better than the 6 percent increase registered in July but below the June growth rate of 8 percent.

For the first eight months of 2012, small retailers have averaged growth of 8 percent while total retail sales are up 5.9 percent.

The MasterCard figures include food service but exclude automobile sales. “Small” is defined as having less than $35 million in annual sales and a payroll of less than 200. Excluding automobiles, such retailers generate more than $100 billion a year in retail sales.

Michael McNamara, global solutions leader for MasterCard SpendingPulse, noted that smaller retailers have outperformed the overall retail market every month since last October. In September 2011, both figures landed at 9.4 percent. August sales were 1.4 percent higher for smaller stores than they were in July, breaking a string of two consecutive months of sequential decreases. Compared to the prior months, July and June sales fell 1.3 and 2.1 percent, respectively.

“Back to school provided a nice bounce throughout the retail landscape,” McNamara told WWD. “There has been pressure on some of the higher-end people, and you see that in year-on-year declines in jewelry.”

Independent jewelers saw their August sales decline 3 percent, a bigger drop than the overall jewelry figure of minus 1.8 percent.

“Monthly sales comparisons will get a bit easier in the jewelry sector as we move into the fourth quarter,” the MasterCard official said.

Marc Bernstein, executive vice president and head of the small business segment of Wells Fargo, described 2012 as a year in which, “in general, there’s been significant strengthening in the health of small business.”

He disclosed that in the first six months of the year his bank had extended $7.4 billion in new loan commitments to small businesses across the U.S., 32 percent higher than in the first half of 2011.

Summarizing activity in the apparel sector, McNamara said that women’s wear had “picked up nicely” while men’s experienced some softness. Children’s apparel and footwear have enjoyed fairly consistent increases, he noted.

“If anything, women’s wear has switched places with men’s as the hot category,” he said.