Sept. Retail Report – Fall Momentum Picks Up

The Big Picture

Once again, it was another month of mixed economic news. The Consumer Confidence Index fell to 48.5 in September from 53.5 in August, yet many retailers reported gains.

Furthermore, the stock market rallied last week on positive economic news that capital goods, including computers and communication equipment, rose 4.1% in August after a 5.3% decline the previous month. Even existing homes sales got a boost in August, rising 7.6% over July’s dismal figures.

While most agree that the third quarter of this year lacked the momentum of the first half, the good news is we expect the fourth-quarter to be stronger, with a boost from holiday sales.

Late Summer/Early Fall Sales

August sales were somewhat soft as expected, given it was the end of the season and many consumers were on vacation.

Men’s came in flat against last year. We saw decreases in suits, dress shirts and dress pants, but gains in special order, sport coats, and jackets. In fact, jackets surged 35% in the month, mostly due to the strength of soft jackets for early fall.

Women’s managed to pull out a 4% gain for August, led by accessories and dresses, which rose 26% and 14%, respectively. (For more detailed trends, see our Trends By Class page.)

Most merchants did a good job of clearing their floors of summer goods with fewer markdowns than last year, but it was the retailers with plenty of early fall merchandise that came out on top.

September sales have been decent, with particular strength in Collections and Better goods. We’re also seeing strength in sportswear with a young vibe.

We expect this momentum to continue into October as cooler weather drives sales of wearable fall goods.

As we move further into the season, remember that you need to stay promotional to drive sales and traffic – whether it’s with online coupons, email offers or “buy one, get one” deals.

The recession has left us with a new way of doing business – we must continuously be promoting, and we don’t see this changing anytime soon. So get creative, meet with your online marketing team, and make sure that you plan brand-building promotions well into the holiday season. This is the only way to keep customers coming in.

Blacks Bottom Line

As we get further into the recovery, don’t forget the good habits you learned during the downturn: buy close to season, flow new goods and promote, promote, promote.