October Retail Report – Fall Gets Off To A Strong Start

The Big Picture
The U.S. economy grew 2.5% during the third quarter, driven by higher consumer spending, according to the latest U.S. Commerce Department figures. The growth allayed fears that we would dip into another recession, and many analysts are predicting that stronger consumer spending will extend through the holiday season.

Here at Blacks, we expect many of our better, luxury and online retailers to have a good holiday season, although it may not be as strong as last year. Much of it depends on whether there are any further economic shocks, and how consumers react to the news.

September Sales
The fall season kicked off on a positive note, with menswear showing a whopping 13% gain over last September while women’s was up 3%, according to Blacks’ exclusive trends.

It looks like men were ready to go back to work given that suits and dress shirts drove much of the gain in menswear, and were up by 28% and 23%, respectively. Pent-up demand, and a desire for the new slender styles also helped with business.

Of course, casual pants also did well, posting a 25% gain, and so did jackets, especially soft jackets.

In women’s wear, special order showed a huge gain, followed by dresses, which were up 16%. However, ready-to-wear fell by 9% from last September.

(For more trends and predictions visit our Trends by Class page.)

Fall Outlook
So far, East and West Coast stores are doing better than those in the South and Mid-Atlantic regions, but all locations will get a boost when the weather starts to turn, prompting sales of jackets, scarves and other winter accessories. We expect fall sales to come in decent and steady, with all categories contributing.

In terms of promotions, many merchants are starting early but we don’t expect to see the deep cuts we have seen in years past. Promotional trends will be set by the department stores, and since they are sticking with lower inventory levels it’s unlikely that they will need to cut back too far.

The only potential bump on the horizon is whether the debt super committee fails to come to the conclusion, triggering further downgrades by the major credit agencies. (See our recent article on this here.) However, consumers have shown that their skins are much thicker than the stock market swings would indicate.

Blacks Bottom Line
Stay focused on your goals and making sure that you have all the details of your holiday planning nailed down, from boxes and wrapping paper to promos.