The Big Picture
The U.S. economy continued to show signs of weakness in July, causing consumer confidence to falter. One of the main factors causing concern was the rising unemployment rate. That said, jobless claims fell to their lowest point since April just last week. Also on Americans’ minds is the lack of agreement on whether or not to raise the U.S. debt ceiling. If an agreement isn’t reached by Aug. 2, the ripple effects could cause economic damage, however, no one is certain of the extent.
Given these concerns, it’s perhaps no surprise that a recent survey by the National Retail Federation (NRF) found that 90% of consumers are concerned about the U.S. economy. Still, the NRF is predicting 4% increase in retail sales for this year.
Here at Blacks, the economic doom and gloom is still not impacting retail sales among our client base. We expect to see positive fall sales in the mid-single digits.
Sales for June came in higher than expected, with gains coming from across the board in better apparel. This just goes to show that the people with money are still willing to spend it. Even some of our moderately priced stores fared well, indicating that consumer confidence may have been higher than analysts predicted.
We saw a 9% increase in menswear for the month, led by casual pants, jeans, and sport coats, all of which made double-digit gains. Suits and neckwear were the only categories to take a dip, which is no surprise considering the season.
Women’s wear posted a 10% gain for June, thanks to a 52% increase in special order and a 23% gain in dresses. Dresses continue to be a standout class and should be carefully planned and funded.
(For more in-depth trends see our Trends-by-class page.)
Late Summer/Early Fall
The heat wave affecting much of the country in July may have actually led to a surprising boost in summer sales. Items such as shorts, t-shirts, flip-flops and summer accessories were flying off the shelves. Although this is typically a slow month, we expected July to come out positive this year.
As we head into fall, shoppers’ desire for something new to wear should keep sales moving, despite the lack of any fresh trends. Early fall collections are already doing well.
Although bad economic news could have a psychological effect on consumers, we don’t predict any real change in their shopping habits until spring of next year when higher product prices may compound an already touchy economic environment.
Blacks Bottom Line
Tune out the bad economic news and focus on your business. Plan according to your real-world numbers and not economic predictions.
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