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Michael McNamara on 2012’s Credit-Savings Balance Challenge

MasterCard executive hopes for pick-up in job market to stoke spending.

Greater use of credit and less saving by consumers might make for happy holidays for U.S. retailers this year, but the good cheer isn’t likely to carry over into 2012.

Speaking at the WWD Summit Monday, Michael McNamara, vice president and global solutions leader of MasterCard Advisors, pointed out that retail sales have continued to grow on a year-over-year basis, but that second-half results have been marked by a deceleration. Including gasoline and groceries, October sales expanded about 5 percent, down from gains in the 8 percent range for most of the year.

“How are people paying for retail sales now?” he asked the audience. “A reduced savings rate and increasing consumer credit. You can live on that for a little while, but that’s not sustainable over the long term.”

What’s needed, he said, is meaningful improvement in payrolls, wages and unemployment. Without these, “when I look at all the pieces of the economic puzzle, it becomes harder and harder to fit them together.” Retailers will also face more formidable same-store sales comparisons next year, he pointed out.

Apparel was one of several categories that has weakened late in the year, whereas groceries, electronics and hardware were trending upward and “eating away at other categories.” Luxury sales were off slightly in October, he said, with New York and other key markets affected, but had resumed a healthier pace so far this month.

“As long as the stock market holds up, [there’s] no need to worry about gas prices with this customer,” he said.

He said it’s unlikely that gas prices during the remainder of the year will fall to $3.15 or below, the price at which consumption would be likely to accelerate among average consumers.

Pressed on how the political climate could affect performance at retail, the MasterCard executive said the Federal Reserve Board rarely takes steps in an election year that are damaging to an incumbent president. However, he is keeping a wary eye on the Congressional Super Committee scheduled to release its report on the federal budget, debts and deficits on Nov. 23, the day before Thanksgiving and just two days before so-called Black Friday, expected again to be the highest-volume day of the year.

“Whoever put those dates together obviously didn’t know retail,” he quipped.

McNamara projected that, “as long as the weather cooperates, Black Friday this year should be the first $20 billion day in this country,” with sales estimated to reach $20.3 billion.

He expects growth in e-commerce to continue to outpace retail sales in general, noting that a few years ago, online sales exceeded $1 billion just three days of the year, a number likely to climb to “at least” 10 in 2011. Overall retail sales for the season, spanning Nov. 1 to Dec. 24, are expected to hit $657 billion, more than $41 billion of that attributable to e-commerce.

Additionally, he surprised many in the audience with his finding that 40 percent of holiday sales are made before the Monday after Thanksgiving, using it to put listeners on notice that “you really have to get it done before Halloween.”