WASHINGTON — Retailers of apparel and accessories can thank slumping auto sales and cold weather for their biggest one-month sales gain since last December, according to economists.
This story first appeared in the November 15, 2002 issue of WWD. Subscribe Today.
Retail sales at clothing and accessories stores jumped 4 percent to $14.69 billion in October against September on a seasonally adjusted basis and sales also gained 3.6 percent when compared with October 2001, the Commerce Department’s report revealed Thursday.
“The consumer has in aggregate so much more money left over at the end of the day, when you think how little money is being spent on autos now,” said Michael J. Donnelly, senior economist at the WEFA Group. “Even with a smaller pot, consumers are going out and buying clothes.”
Donnelly stressed that total consumption is still down, but he added that consumer spending has “shifted dramatically.”
“There have been only three other months over the last decade where apparel sales rose 4 percent or more, and two of those months were rebounds from the Sept. 11 falloff,” said Tara Weiner, managing partner of Deloitte & Touche’s National Consumer Business Practice.
“For department stores, it was the strongest gain in 15 months,” Weiner said. “October’s blast of cold air seems to have given consumers a reason to replace old clothing, which helped boost apparel sales.”
Sales at department stores, excluding leased departments, rose 1.2 percent to $19.01 billion in October compared with September, but sales dropped 0.8 percent against October 2001.
“In addition, there is pent-up demand from last year,” Weiner added. “Because last winter was particularly mild, a lot of people didn’t buy new coats or other cold-weather clothing.”
At general merchandise stores, sales rose 1.1 percent last month to $38.75 billion and increased by 5.7 percent against a year ago.
The National Retail Federation is still standing by its holiday sales forecast of 4 percent growth, barring another jolt to the economy.
“The wild card in the holiday picture could be an external shock, such as a breakout of war with Iraq or soaring oil prices prior to the end of the year,” said Rosalind Wells, NRF chief economist. “We think this scenario, however, is unlikely.”
Overall retail sales were flat against September and fell slightly by 0.7 percent, mostly because of a drop in auto sales, compared with October 2001. Retail sales, excluding autos, rose 0.7 percent in October and gained 4.5 percent against a year ago.
“In the overall economy, there will be a bit of a slump in the fourth quarter even with a big bump in retail sales,” Donnelly said. “People will be shocked by fourth-quarter numbers, but the one category that will do alright is retail.”