The Big Picture
While continuing Covid cases have given the stock market some pause, U.S. consumers continue to spend at a steady clip. Overall retail sales beat expectations in August, increasing by 0.7%, compared to a decline of 1.8% in the previous month. This came despite an increase in weekly jobless claims.
Given the news, the National Retail Federation reinstated its confidence in the strength of the market, saying that it still expects record holiday sales. Once again, online is expected to see the most dramatic increases, but in-store spending is estimated to be not far behind.
August Sales & Shortages
In our client stores we continue to see resilient consumer demand, with a majority of stores making or beating their sales plans for August. Menswear has been particularly strong, as customers restock their wardrobes with Clothing categories to attend weddings and other special in-person events.
In fact, there is currently a shortage of basic suits and white dress shirts, since vendors concentrated on producing seasonal suits, not expecting a resurgence in demand for basics. There are also some shortages in popular women’s categories, with many merchants saying that they cannot get their hands on enough product. But since more deliveries shipped in August than anticipated, we hope this problem will resolve quicker than expected.
With such strong sales momentum this could be one of the best holiday seasons we’ve ever seen. Some of our stores even saw early holiday shopping in July and August. Given certain product shortages, shoppers are willing to buy when they can rather than wait. And even though the holiday season will be longer than normal, we’re planning many client stores even to up 30% over 2019, with the best performers in resort locations.
That said, we are still facing staffing shortages. Merchants are doing the best that they can, often taking on multiple roles, and sometimes shortening their business hours, in order to manage the boom with fewer salespeople. Unfortunately, this problem doesn’t look likely to resolve itself anytime soon.
Since the season has been extended by strong, consistent demand and awareness of product scarcity, start rolling in your holiday products sooner than normal.
Blacks’ Bottom Line
Move up your fall/holiday shipments a full 30-days to take advantage of early demand and re-capitalize your business.