November Retail Report – Holiday Predictions & Spring Plans

The Big Picture
Fresh off of Black Friday weekend’s record-breaking sales, it’s hard not to be optimistic about the holiday season. Even consumer confidence has snapped back, with the Conference Board’s Confidence Index rising from 40.9 in October to 56.0 in November as the outlook for jobs and wages improved.

But while we expect that middle-class consumers will start to open up their wallets a little more, our core customers in the better and luxury markets have been holding steady. Among our better retailers, we expect flat growth for the rest of the season with the real gains coming in spring.

October Sales
Given that most of the fashion-driven consumers bought their fall items early in the season, it’s perhaps no surprise that October sales came in flat overall. Menswear posted a 1% gain over last year, thanks to the strength in sports coats, dress shirts, jeans and jackets.

Women’s wear didn’t do as well, posting a 4% decrease due to weakness in ready-to-wear and accessories. Dresses, however, continued to sell, showing a 24% gain over last year.

(For more in-depth trends and forecasts check out our Trends by Class page.)

As we move further into the season, we expect sales in brick-and-mortar stores to continue parallel to last year, with a little boost from this year’s banner Black Friday.

The situation is different for online retailers, especially those that are highly promotional. We expect them to produce double-digit gains as they take advantage of continued online growth.

Getting Ready For Spring
With your spring buys in the bag, now is the time to focus on clearing fall inventory to make room for fresh deliveries over the next 30 days. This is when your spring-coded goods should begin to land, so your challenge is to sell through fall goods while retaining a strong level of margin.

Most merchants are already discounting at around the same level as last year.

Although we expect fall sales to come in even, we are expecting strong growth for spring so this is the season to really focus on. It is hard to say whether we will experience much growth later in 2012 since we’ve already had two years of retail growth which means we are due for a slowdown as part of this normal retail cycle.

Blacks Bottom Line
The strategy you take for clearing your fall inventory will determine how much margin you retain, so make sure that your marketing and promotional engines are fired up and ready to go.