WASHINGTON — Two key U.S. government reports released Friday highlighted the slow road to recovery ahead for the apparel sector.
Specialty store sales dropped a seasonally adjusted 0.2 percent in December compared with the previous month to $18.7 billion and department stores sales fell 1.9 percent to $15.4 billion, the Commerce Department said. General merchandise stores, a category that includes discounters and department stores, saw sales decline 0.7 percent to $51.4 billion.
In yearly comparisons, sales at specialty stores rose 7.4 percent, but department store sales were off 1.3 percent. Sales at general merchandise stores were up 2.8 percent compared with a year earlier.
In the overall economy, sales eked out a 0.6 percent increase in December compared with November to $380.9 billion, slightly below expectations, and were up 7.9 percent from a year earlier.
“While challenges certainly still remain, consumer spending is steadily returning to prerecession levels,” said Sandy Kennedy, president of the Retail Industry Leaders Association. “The economic uncertainty and consumer anguish that defined the past three years appears to be fading as increasing signs of growth and stability in the economy emerge.”
Sales of all goods and services during November and December had “the strongest showing in recent memory,” said Chris Christopher, senior principal economist with IHS Global Insight, rising 5.7 percent over the same period a year earlier.
Retail apparel prices edged up a seasonally adjusted 0.1 percent in December compared with November, but fell 1.1 percent from a year earlier, Commerce reported in its Consumer Price Index. Women’s apparel prices declined 0.2 percent month-to-month and 2.1 percent year-to-year. Men’s apparel prices dropped 0.4 percent compared with a month earlier and fell 0.7 percent from December 2009.
Prices for all goods and services increased 0.5 percent in December and were up 1.5 percent from a year earlier. The so-called “core” prices, which exclude the volatile food and energy sectors, increased 0.1 percent month-to-month and 0.8 percent year-to-year.
Rising costs throughout the supply chain are putting pressure on apparel prices, but with consumers still pinched by economic uncertainty, experts said retailers don’t have much pricing power.
“There’s still no sign of robust growth,” said Kevin Regan, senior managing director and retail industry expert with FTI Consulting. “There are too many headwinds facing the consumer and they’re being cautious. They’re bargain hunting. We’re still in the second or third inning [of a recovery].”