BEIGE BOOK: RETAILING SOLID; WEATHER AIDED APPAREL
Byline: Jennifer Owens
WASHINGTON — Retailing nationwide has been generally reflecting the economy’s healthy glow, according to the latest survey of business conditions in the Federal Reserve’s 12 districts.
While the report — issued about every six weeks and commonly known as “the beige book” — contained a few downbeat observations on apparel and related merchandise, the category, for the most part, appears to be holding up well in the period covered, from late April through May. In some areas, warm weather was cited as giving apparel a particularly lively boost.
Atlanta seemed to have one of the gloomier summaries, noting: “Recent sales had gone as planned, but a significant minority noted their disappointment.” Nevertheless, the report said most stores’ May sales exceeded last year’s levels.
Inventories were generally on target, and most retailers said they expected second-quarter sales to exceed last year’s levels slightly.
In New York, many retailers reported some weakness in children’s and infants’ wear, as well as accessories and cosmetics, while sales of home furnishings and appliances were called particularly strong. Retail inventory levels were found generally satisfactory, “although one contact noted lean stocks of apparel and various seasonal merchandise,” the report stated.
“While most retailers report only modest cost savings on Asian imports, one contact notes that reduced-price electronics from Asia are now reaching the store shelves and that apparel prices are expected to decline noticeably beginning in August,” the New York report stated.
In Boston, where overall retail sales were brimming at 5 to 8 percent over the same period last year, retailers said their expectations had been bested. Retailers said the strongest sectors included consumer electronics, home furnishings, building materials and general merchandise.
Footwear sales were weak.
Most Boston respondents said spring brought steady selling prices. Most also said they expect their strong sales growth to continue. “Nonetheless,” the report stated, “all express some uneasiness about how long the economic expansion can continue.”
In Cleveland, discount stores showed higher sales, while department stores were either on or below plan. “Retailers report notable strength in northern Kentucky, but other areas of the district have seen only modest gains,” the report stated. “Furniture, housewares and women’s apparel are selling particularly well, but children’s apparel sales are sluggish.”
In Philadelphia, retailers said sales growth rode high, with a healthy 5 percent increase over last year, continuing a growth trend that began in April.
Sales of home goods and apparel were said to be above expectations, and in general, store executives said inventories were at appropriate levels. Selling prices were also stable.
Chicago consumers increased their spending moderately in April and May, with sales results exceeding most retailer expectations. “A few national chains indicated that sales results in the Midwest were stronger than in other regions, with one asserting that it was the strongest in the country,” the report stated. It added that apparel sales benefited from the warm weather, with notable strength showing in men’s and young men’s sportswear.
Warm weather also helped apparel sales in St. Louis, where athletic wear and other seasonal styles have been hot sellers. Most retailers said their inventories were smaller than usual because of better management. Overall, the report stated, “Most retailers have extremely positive outlooks for the summer.”
Mall managers in Minnesota said customer traffic remained brisk through late spring. The state’s national chains as well as its regional and local retailers all generally reported good sales for the season compared with last year. “The exception to this positive pattern continues to be retailers in rural towns where agriculture is the primary activity,” the report stated.
Likewise, Kansas City merchants also continued to report robust sales in late spring, well above those a year ago. “Almost all respondents expect sales over the next three months to maintain the strong pace registered so far this year,” the report noted. Inventories across the district expanded slightly during the six-week period, but most retailers said they were satisfied with their stock and didn’t plan any major changes.
Retail sales were strong in Dallas, where one contact has increased its forecast for the coming year’s sales growth. Meanwhile, in Richmond, retailers also posted healthy gains, with some apparel sellers adding staff in anticipation of stronger sales.
Finally, in San Francisco, retail sales were robust overall, with inventories at desired levels.