Apparel Online Bangladesh Magazine October Issue 2018 | Page 64

WORLD WRAP
TO ADVERTISE GOING TO A GOOD EVENT?
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US APPAREL RETAIL
MOVING UPWARDS AS
SHOPPERS ARE BACK
TO BUYING
In the last few years, the term ‘retail apocalypse’ has often been used to describe the current state of
US retail, but from the recent upswing in retail, it would seem that the expression is an exaggeration
of the situation. No one can deny that retailers have faced tough challenges and still continue to
do so, but strong US retail sales over the past three months – particularly for apparel – has come
as a boom for the economy, clearly indicating that shoppers are back in the market with fresh zeal!
T
he buzz is back in retail and the
recently released Government
data confirms the movement,
announcing that US retail sales
rose about 6% year-on-year in the
May-through-July period, which
roughly lines up with the second
fiscal quarter for retailers. More
encouraging is the fact that sales
in clothing and clothing accessories
stores rose 6.6%, higher than the
overall retail sales in average.
In July alone, US retail sales
increased 0.4% over June sales
and 4.9% Y-o-Y, according to the
National Retail Federation (NRF).
Online and other non-store sales
climbed 11.3% Y-o-Y, the NRF noted.
What is exciting is that consumers
continued to spend despite fears
over the escalating trade war.
In fact, the NRF has revised its
annual forecast for 2018 based
on the current flip in sales. The
organisation now expects retail
sales for the year to grow at least
4.5% over 2017, rather than its
original prediction of 3.8% to 4.4%
growth. “The numbers mirror the
economy, which is in very good
shape,” said NRF Chief Economist
Jack Kleinhenz, adding,
“Consumer fundamentals remain
healthy and continue to provide
wherewithal for consumers to drive
domestic economic growth.”
Retail analysts believe that this
upward swing in retail has been
brought about by a combination
of many positive reasons. Higher
wages, gains in disposable income,
a strong job market and record-
high household net worth have
all set the stage for very robust
growth in the nation’s consumer-
driven economy.
The positive sentiments have come
at a time when retailers were
looking for survival strategies.
NRF, in particular, believes
that this is an opportunity time
for retailers, an attributing its
upgrade in growth to better-than-
expected consumer spending in
H1 of the year. However, adding
64 Apparel Online Bangladesh | October 2018 | www.apparelresources.com
ESSENTIALS
Unemployment in the
United States is at its
lowest in 50 years and
industrial production is
growing at some of the
fastest rates for 20 years,
helping US consumer
sentiment rise to multi-
decade highs. Several
companies, including the
world’s largest private
employer Walmart Inc.
and Costco Wholesale
Corp, have used reforms in
the US tax code to award
bonuses, benefits and hike
wages for their employees.
a note of pragmatism, Kleinhenz
said, “Uncertainty surrounding
the trade war and higher-than-
expected inflation due in part to
increased Crude Oil prices could
make consumers cautious during the
Fall season.”
Off-price retailers are the best
placed for growth…
Coincidentally, the retailer growth
indicators that have come in roughly
line up with the second fiscal
quarter for retailers and results
announced are encouraging. The
best results have come in from
off-price retailers that are growing
on the ‘value-proposition’ ideology
that they represent. Dollar Tree,