Consumers are making up for lost time, taking advantage of government stimulus and boosting their spending after a locked down 2020 — but they’ve been tighter with their wallets for fashion’s brick-and-mortar set, especially department stores.
Total June retail and food service sales rose a seasonally adjusted 0.6 percent from May and were up 18 percent from a year ago.
That trend, characterized by slower month-to-month build backs and big year-over-year gains was even more apparent in fashion — although it only tells part of the tale.
June apparel and accessories specialty store sales were up 2.6 percent from May and 47.1 percent from a year earlier, which COVID-19 had many stores sitting idle. Department stores rose 5.9 percent from May and 24.4 percent from a year ago. And non-store retailers, a category made up of mostly e-commerce sites, increased 1.2 percent from May and 12 percent compared with a year ago.
However, with vaccinations sending many people back out to shop freely for the first time since the pandemic started and last year being such a nightmare, comparisons to 2019 offer a better look at just how the retail rebounding is going.
A WWD analysis of the latest Census Bureau data released on Friday showed that total sales so far this year are up 19 percent from the first half of 2019.
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But fashion is missing the boat.
First-half specialty stores sales are lagging the market and up only 7 percent compared with two years earlier, while department stores are down 2 percent. (The trend improved somewhat recently, with department stores up 6.3 percent on a two-year basis last month.)
Many retailers are picking up a good part of that business with their websites — feeding into the reading of non-store retail sales, which showed a 40 percent two-year jump in the first half.
Fashion brands are looking for that online dynamic to continue and did much themselves to push the migration to the web, rushing to improve their e-commerce sites and offering curbside pickup and other online friendly options. Many stores were also closed — through corporate pruning, bankruptcy or tussles with landlords — over the past year.
Now, as the U.S. retail scene opens back up, the industry is watching closely, looking for new ways to gauge the benefits and costs of stores and how they can best use all that square footage.
The good news is that the economy is bouncing back and, even if inflation fears are starting to settle in, retailers might still have a little more time to figure out just what comes next.
And that’s because what comes next, immediately, could be a big back to school season and spending as shoppers reemerge.
Jack Kleinhenz, chief economist of the National Retail Federation, said: “We’re continuing to see an impressive recovery. The economy and consumption are particularly sensitive to government policy, and the boost we saw from government support earlier in the year is continuing to show benefits. Reopening of both stores and the overall economy has progressed, and even higher prices seen in some retail categories reflecting the push-and-pull of supply chain challenges haven’t proven to be a deterrent to spending. As more people get vaccinated and get out, some of the growth will shift to services rather than retail but there’s enough momentum to support both.”
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