Smaller retailers are continuing to excel in a tough market even as their margin over larger stores narrows.
In the second monthly SpendingPulse for Small Business survey, prepared by MasterCard Advisors in collaboration with Wells Fargo, sales at smaller establishments grew 6 percent in July, down from their 8 percent growth rate in the initial June study. Overall retail grew at a 3.3 percent pace in July versus the 3.4 percent growth rate in June. The results marked the 10th consecutive month in which smaller retailers, many of them independents, have achieved better results than retailers in general and, by extension, larger chain operations.
Apparel sales, subject last month to a fair amount of clearance activity to make room for fall and back-to-school deliveries, improved from their earlier trend, rising more than 6 percent, according to preliminary results, versus growth of about 3 percent in June. Jewelry declined about 1.1 percent for the month. “The jewelry market is very fragmented and has a big population of smaller retailers and independents. The trend has been relatively flat,” Michael McNamara, global solutions leader for MasterCard SpendingPulse, told WWD.
“Small” is defined as having less than $35 million in annual sales and a payroll of less than 200. Most companies covered in this category, however, have sales of less than $10 million, according to McNamara. The results cover all sales made in cash or via credit card or check.
“There was a narrowing of the margin between overall retail and smaller stores last month,” McNamara said, “and it’s indicative of the increase in gas prices — roughly 30 cents [a gallon] in the past month or so. Many of these establishments are restaurants, and they tend to get hurt when gas goes up as it has.”
In June, gas prices were still headed downward, a trend that started in April. They’ve resumed their upward climb with the onset of the summer months and higher levels of driving. The most recent average provided by the Lundberg Survey was $3.69 a gallon.
With back-to-school selling now dominating retail selling floors, McNamara said he was reluctant to read too much into the results that will follow.
“I wouldn’t necessarily look at the b-t-s figure and extrapolate holiday results based on that, especially not this year,” he said. “Gas has been a variable all year, but as we get closer to holiday we’re going to have the election and the fiscal-cliff issue to deal with. Those things aren’t front-of-mind right now, but they will be as we move closer to holiday.”
Excluding automobiles, small retailers account for more than $100 billion a month in retail sales.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
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@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
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