WASHINGTON — Retail apparel sales dropped for the second month in a row, indicating that the road to full economic recovery is still precarious, but specialty store sales continued to improve in year-over-year comparisons.
This story first appeared in the June 14, 2010 issue of WWD. Subscribe Today.
Clothing and accessories store sales declined 1.3 percent in May compared with a month earlier, while department store receipts dropped 1.8 percent, the U.S. Commerce Department reported Friday. In yearly comparisons, however, sales at specialty stores advanced 4.1 percent to $18.1 billion, as department store sales fell 2.8 percent to $15.4 billion.
Sandy Kennedy, president of the Retail Industry Leaders’ Association, said merchants are in a better position now than a year ago, but the retail sales figures suggest that “the climb [to full recovery] may be steeper than we thought.”
Sales of all goods and services fell 1.2 percent in May compared with April, but increased 6.9 percent to $362.5 billion from a year earlier.
“It’s a fragile economy, there’s caution out there,” said Kevin Regan, senior managing director and retail industry expert with FTI Consulting. “[Consumers] are going to continue to be cautious because there aren’t enough indications that things are going to be better for them in the future.”
May was full of bad headlines, Regan said, ranging from the fiscal crisis in Greece to the BP oil spill in Louisiana and continued employment problems on the national and regional levels, so it isn’t surprising consumers got spooked into “retreating back into their shell.” The economy is still fragile and recovery may be slower to arrive than people would like, he said, but the long-term outlook is not entirely gloomy.
“Today’s data reflect what we know to be true: Uncertainty remains, and there is work left to do to ensure long-term economic stability,” said Commerce Secretary Gary Locke. “Overall, consumer spending has increased modestly this quarter, and as Americans continue to cut down their debt, financial positions will improve.”