U.S. FIGURES CONFIRMS SALES IN MAY BLOOMED FOR GENERAL MERCHANDISER
Byline: Jim Ostroff
WASHINGTON — Government statistics issued Thursday gave further evidence that May was a pretty merry month for many of the nation’s retailers.
According to the Commerce Department tally, sales in general merchandise stores — including discount, department and variety stores — were up a healthy 0.6 percent in May, on a seasonally adjusted basis, on the heels of a 0.9 percent rise in April. Department store sales alone also increased 0.6 percent in May against April in the wake of a strong 1.1 percent jump during April.
Against a year ago, general merchandisers posted an increase of 8.1 percent in May. Department stores alone achieved a hike of 8.6 percent on a year-to-year basis.
May sales in apparel and accessory stores held even with April, but against a year ago they rose 8 percent.
Overall, retail sales rose 0.9 percent during May, due largely to a consumer spending spree on cars and trucks, whose sales soared 2.5 percent. Against a year ago, retail sales overall rose 6.6 percent.
While the figures helped fuel confidence for the rest of the year among some analysts, others saw a potential slowing in apparel sales growth.
“[Federal Reserve Bank chairman Alan] Greenspan is right when he talks about this being a great economy with consumers having money to spend, and this just won’t tank in the next six months,” said Ken Goldstein, an economist with the New York-based Conference Board.
“A further indication of how good the economy is: Women, after spending so much time cutting back on apparel purchases, have decided to splurge a bit,” he said.
Sandra Shaber, executive vice president for global services with the WEFA Group, Philadelphia, contends that generally higher retail apparel sales have in essence enjoyed a ride on the back of much higher consumer spending on homes, furniture, autos and appliances.
“Clearly, apparel sales have improved after what looked like recession levels a few years earlier,” Shaber said. “But when consumer spending slows, as surely it will, one of the first areas where we will see this weakness is in apparel sales, and we believe the signs already are there for at least slower growth,” she said.
Ira Silver, J.C. Penney Co.’s chief economist, had the view that with the economy strong, employment and salary growth relatively high, it wasn’t surprising that “consumers bought a lot of apparel in the first few months of this year.”
“But there is only so much apparel that you need before your closet is full, especially in the warmer months, and you stop shopping until the back-to-school season,” he said.