WASHINGTON — Consumers pulled back on spending on apparel and accessories in October, as sales at specialty and department stores fell, a U.S. Commerce Department report said Tuesday.
Sales at clothing and accessories stores dipped a seasonally adjusted 0.7 percent to $19.1 billion in October compared with September, while sales at department stores declined 1.2 percent to $15.3 billion last month. General merchandise stores, which include discounters and department stores, had a flat month with sales holding at $53.1 billion.
“Apparel specialty stores have been growing quite strongly, and a pullback in one particular month is not overly concerning,” said Scott Hoyt, senior director of consumer economics at Moody’s Analytics. “Department stores have been trending flat, and the flatness in general merchandise sales suggests there is pretty good growth at warehouse clubs and supercenters, which offset the decline in department store sales.”
October is traditionally a clearance month as retailers gear up for the holiday season, said Kevin Regan, senior managing director of FTI Consulting.
“I think retailers took the position that October is not a critical month anyway,” Regan said. “It is usually a clearance month for retailers who are preparing for the holiday season, but the numbers are still holding up.”
On a year-over-year basis, apparel and accessories stores sales were up 5.8 percent last month compared with October 2010, while sales at general merchandise stores were 3.8 percent higher than a year earlier. The only weakness was in department store sales, which were down 0.2 percent year-over-year.
“It’s sort of like defining the law of gravity, because the consumer is spending money and showing signs of keeping the economy going, despite the fact that the housing market is still weaker than a year ago, wages are weak and there has been very little income growth,” Regan said.
In the overall economy, retail sales edged up 0.5 percent in October to $397.7 billion, beating economists’ expectations and signaling some strength in broader consumer spending, particularly in the electronics and appliances, building supply and online sectors.
“Even though the American consumer faces strong headwinds — low consumer confidence, high unemployment rates, higher prices and poor wage growth — they are still willing to splurge on that one expensive item every once in a while,” said Chris G. Christopher Jr., senior principal economist at IHS Global Insight.
Christopher attributed the strength in overall retail sales in part to the release of Apple’s iPhone 4S, which helped drive up sales at electronics stores by 3.7 percent in October. But, he warned it was not necessarily a boost in overall consumer demand.
“Department and clothing stores took a major hit in October, indicating that demand for a particular set of products, rather than an improvement in overall consumer demand, is driving the increase in retail sales,” Christopher said.