Blacks Retail Shopping Report
The Big Picture
Both the economy and retail sales are mixed as we speed toward the end of the year.
On the economic front, imports are falling and industrial production is down, while consumer prices are inching up. However ,
unemployment dropped to 5% in October, giving the Fed a good reason to go ahead with planned rate increases when they meet next month.
For retailers, the season started off slower than expected, leaving many with excess inventory. Big box chains such as Walmart are
reporting steep declines, but some online retailers such as Amazon.com are planning for double-digit growth this holiday season. Looking ahead, we expect these mixed results to continue as some pockets of the economy do better than others.
Menswear continues to struggle as we had further into the fall season. Our merchants were down 1% overall last month, with the heaviest declines in clothing categories such as suits, dress shirts, dress pants and neckwear. Knitwear represented one of the few bright spots, with a 17% increase over last year.
Women’s wear did considerably better, posting a 6% gain in October, with most of the action coming from special orders and accessories. As we head into holiday, we expect women’s to continue to outperform menswear, simply because women’s apparel and accessories are more popular in terms of gifts and are often needed for special events.
Holiday Plans. At this point, it’s a race to the finish of the holiday season. It’s important that you predict your trends over the next month to determine your markdowns.
Remember, we are not focusing on margin as much as we are on cash flow. The high margin part of the season is over. This is your opportunity to turn as much of your inventory as possible into cash. The market is highly promotional right now so you have to play the game, even if you don’t want to . The consumer expects it.
There is also a bit of opportunity in the first quarter of the year since we are going up against some weak numbers from February and March, when winter weather hit many retailers. Keep this in mind as you make your 2016 plans. Cash Flow is King This Holiday Season.
About the Author;
Steve Pruitt, a retail planning expert, is Senior Analyst for Blacks Retail. The next 30 days represent your biggest opportunity of the year to generate cash flow. Don’t miss out by putting off promotions.