New Year’s Retail Report – Holiday Wrap Up & Spring Predictions

The Big Picture
Although the numbers are still being crunched, December sales look to be higher than expected with many of our better retailers posting double-digit gains in the week leading up to Christmas. This means that for the holiday season overall we could see mid-to-high single digit gains, given that November was a bit flat.

Much of the sales were driven by constant promotions, most of which were planned, allowing retailers to retain margin. The promotional environment motivated consumers and helped them shake off economic concerns and keep spending.

Slow Start, Strong Finish
As mentioned, the season started out slow with menswear posting a 2% gain in November and women’s wear posting a 1% uptick, according to Blacks’ exclusive trends.

Men’s sales were led by suits, neckwear, and casual pants, while dresses and special orders pushed women’s wear into positive numbers.

(For a more in-depth trends and predictions see our Trends-by-Class page.)

By the end of the season consumers were more than willing to take advantage of the steady stream of promotions that merchants dangled before them. This season was definitely more promotional than last year as retailers worked to fight economic unease. One thing to keep in mind is that although unemployment is high—currently at 8.7%— some 91% of Americans still have jobs and discretionary income.

Spring Sales
We’ve already seen demand for early spring collections among some of our better retailers, especially in women’s wear. We expect spring to be strong overall but it may get off to a lackluster start since December’s strong sales and deep discounts took some business off the table for January.

Our advice is to hold your course because we believe that spring sales will pop a little later in the season. That said, it is probably a good idea to plan conservatively this year, given that we don’t know where the economic and political environment will take us. Just pay attention to your trends from week to week and keep in mind that you can easily do 20% more in sales while still being on your inventory plan.

Blacks Bottom Line
Don’t overreact to a slow start in the spring season. Hold your course because we expect sales to rebound after February.