Holiday shopping beats out Sandy in November

NEW YORK — Spending by holiday shoppers trumped superstorm Sandy’s impact on small businesses in November.

A report Wednesday from MasterCard Advisors and Wells Fargo shows that shoppers spent 5.2 percent more at small retailers in November than they did last year. Small businesses even fared better than the industry at large: Total U.S. retail sales increased 4.5 percent for the same period.

Small business and large businesses alike had a busy month: Superstorm Sandy hammered much of the East Coast, the presidential election dominated consumer psyches and the holiday shopping season began in earnest for many retailers. The weather did hurt sales at some businesses but holiday shopping offset that. Additionally, the small-business sector is heavy with food, hardware and other businesses that would benefit from storm-recovery sales.

When food services, autos and gasoline are excluded, the sales growth rate improves to 7.3 percent versus a 4.4 percent increase in October.

The report found that smaller retailers did show improvement from October to November, but it wasn’t enough to offset a downward sales trend in place since February. November’s results were also below the 5.5 percent average of the prior three months.

It’s been a bumpy road for retailers since the recession. Consumer spending has recovered from the depths of the economic downturn but shoppers are still far from carefree. The coming weeks will test consumers’ resilience, given the holiday shopping season and threat of drastic tax hikes and government spending cuts looming if Congress and the White House cannot reach a deal to avoid the “fiscal cliff.”

“While the uncertainty in Washington may slow or reverse this growth, small retail businesses appear well positioned to improve sales at the end of the year,” said Marc Bernstein, head of small business for Wells Fargo.

The SpendingPulse report measures sales at retailers with annual revenue of less than $35 million and fewer than 200 employees.

Small retailers are considered a critical part of the economy because they account for more than $100 billion in sales every month in the U.S.

MasterCard and Wells Fargo compile their figures from payments made through the MasterCard processing system as well as estimates of other types of payment, including cash and checks. The sales come from more than a million retail locations. The data is used to project estimates for small business spending overall, not just transactions involving MasterCard.

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