LATEST BEIGE BOOK: APPAREL MOVING, NATIONALLY
Byline: Alison Maxwell
WASHINGTON — With only a couple of notable exceptions, retail apparel business was lively throughout the country in July, August and early September, according to the latest survey of business conditions released Wednesday by the Federal Reserve.
The report, issued about every six weeks and known as the beige book because of the color of its cover, has retailers in regions from Boston to Minneapolis to Dallas all reporting “moderate-to-brisk rates of economic growth.” New York and Chicago, though, indicated some disappointment in apparel movement.
Districts also reported that price pressures at retail are not readily apparent, but pressures at the wholesale level appear to be increasing.
In the New York region, major retail chains reported apparel sales were mixed and slightly below plan in August. Most reported some pickup in early September. Sales performance varied widely with year-over-year same-store sales ranging from minus-2 percent to gains of up to 10 percent. Overall, New York State’s tax-free week on moderately priced apparel and footwear had no discernible effect on sales, according to the report. Contacts reported widespread labor shortages, but no significant acceleration in wages.
Retailers in Boston reported solid growth that met expectations during the summer. Discount retailers said back-to-school sales were stronger than expected. Tight labor markets were commonplace, but not constraining store operations. In manufacturing, sales of apparel and textiles continued to decline as a result of import competition.
In Philadelphia, retail contacts reported strong sales of women’s apparel in addition to back-to-school merchandise. Store executives said sales rates have been in line with plans, but some said they had to implement unscheduled price reductions to meet sales goals. Cleveland retailers reported “exceptional” sales strength, especially in apparel. Those strong sales are expected to continue into the holiday shopping season. Retail inventories were low, and retailers said they plan to accelerate their yearend inventory as a Y2K precaution.
Economic growth in the Richmond district “slipped a notch” from the brisk pace reported in July. Retailers reported strong back-to-school apparel sales, but reported decreasing optimism regarding sales in coming months. Textile mills in the district continued to report overcapacity and plant closings.
In Atlanta, contacts reported good July retail sales but weakened August sales — blamed on an early school start that shifted purchases into July. In Florida, a nine-day sales-tax moratorium boosted sales in August: strong sellers were women’s and children’s apparel and shoes.
General merchandisers reported soft sales of apparel in the Chicago district, although there were some exceptions among discounters who saw strong women’s apparel sales. Overall retail sales in August and early September were in line with retailer expectations..
St. Louis district retailers reported that retail sales were up on average 7 to 8 percent in July and August against year-ago levels. Apparel sales were especially strong during the back-to-school season. Minneapolis retailers said a tax rebate payout to about 2 million people in Minnesota boosted retail sales. A major Minneapolis-based retailer reported a 13 percent gain in sales for the three months ending in July.
In Kansas City, casual clothing and women’s cosmetics were strong. Dallas retailers reported good sales growth due to a Texas tax holiday in early August. In San Francisco, sales growth was reportedly the strongest at big-box retailers and specialty stores catering to niche markets. Department store sales were flat compared to last year, as lower average selling prices offset higher unit sales.