Plagued by Promotions, Apparel Sector Endures Another Month of Soft Sales in July

Retail sales growth slowed in July, according to data released Wednesday morning by the U.S. Department of Commerce, further evidence that the economic recovery is occurring in fits and starts.

Total adjusted retail sales were $439.8 billion, essentially flat with June, and up by only 4.4% on a 12-month smoothed basis, its lowest rate of increase in five months.

Total retail inventory increased by 3.75% in June, the most recent month available, resulting in a barely elevated inventory-to-sales ratio for the month.


Total retail sales growth was pressured by slowing autos sales, which rose by 6.8%, their smallest growth in five months, and well below the low-double-digit levels seen in many of the past 24 months. Retail Sales excluding autos rose by 3.8% on a 12-month smoothed basis. Sales in stores that sell home products (furniture, appliances, electronics and building materials) also declined.

Department, chain and discount stores suffered the biggest blow of any major sector, with sales down a smoothed 5.3%. June inventory at big stores plunged by 6.4%, due to aggressive clearance promotions and the implementation of systems that increase inventory efficiency and visibility.


Apparel specialty store sales rose by almost 2 percent, better than June’s 1.5% gain. Specialty store inventories edged down by 1.35% in June.


The apparel specialty increase was not enough to offset the big store decline’s impact on the combined sector, however, department, chain, discount and specialty store sales, a reliable barometer of apparel sales, fell by 1 percent.


Apparel sales have been depressed by the relentless promotions occurring in virtually every channel of the business. Due to an overabundance of product in a growing amount of selling space, which now includes cyberspace chasing sluggish demand and a consumer who has been trained to keep demanding more for less, this will not go away any time soon. 


Recent News

Financial Roundup: Sears Canada Begins Turnaround, Unifi Performs Internationally, and Boohoo and Kering Defy the Market

Challenges at retail continue to negatively affect the bottom line for companies along the value chain—except in for luxury and fast fashion.

This content is for Annual, Monthly and Limited members only. You can read up to five free articles each month with a Limited Level Subscription. Please log in, or register.
Log In Register
Read more