Re­tail­ers to Reap Ben­e­fits of Strong Con­sumer Spend­ing Wave

WWD Digital Daily - - News - BY

Re­tail sales are ex­pected to rise this year by the fastest pace since 2012.

Re­tail­ers are on track for a strong year, ac­cord­ing to Michael McNa­mara, who runs Spend­ingPulse at MasterCard Ad­vi­sors.

He is pre­dict­ing that sales, ex­clud­ing auto and gas, will jump more than 5 per­cent in 2018 as a whole as the strong jobs mar­ket and buoy­ant con­sumer con­fi­dence trans­late into more spend­ing this year. If this ma­te­ri­al­izes, it will be the fastest pace of growth since 2012.

“We're look­ing at good eco­nomic fun­da­men­tals. We're in good con­di­tion to have a re­ally pro­duc­tive hol­i­day sea­son,” he said.

That was not the only good news the data guru had for the au­di­ence as it's not just the wealthy that are buy­ing more, with spend­ing up across the board.

While he has seen an in­creased rate of spend­ing among those that make about $150,000 for a while, lower-in­come cat­e­gories are also fi­nally start­ing to see in­creased spend­ing as a stronger econ­omy makes fam­i­lies feel bet­ter off.

In par­tic­u­lar, the sales growth rate for those who make un­der $50,000 dou­bled from 2 per­cent to 4 per­cent. That's im­por­tant be­cause they ac­count for 40 per­cent of re­tail sales.

“It's re­ally good to see a broad-based in­crease in spend­ing that is pow­er­ing some of the top line fig­ures,” McNa­mara said.

As for spe­cialty ap­parel, sales were up 5.6 per­cent in the year to Septem­ber, with more of those oc­cur­ring on­line than ever be­fore as it now makes up 30 per­cent of spe­cialty ap­parel sales. He ex­pects sales to be up around 5.2 per­cent for the hol­i­day sea­son.

Women's, chil­dren's and fam­ily cat­e­gories were all steadily im­prov­ing over last sev­eral months, with a good back-to-school pe­riod across the board.

There were just two ar­eas that weren't fol­low­ing suit. The first was footwear, which has been lag­ging be­hind other sec­tors, al­though McNa­mara was at a loss to ex­plain why.

The sec­ond was that Septem­ber lux­ury re­tail sales came in a lit­tle softer than ex­pected, but McNa­mara be­lieves a strong la­bor mar­ket, signs that wages are fi­nally ris­ing and re­silient con­sumer con­fi­dence should be enough to fuel sales and in turn boost the econ­omy.

He noted that only time will tell if on­go­ing tur­bu­lence in the stock mar­ket af­fects the lux­ury mar­ket.

“That's an area that we're watch­ing. [But] the fun­da­men­tals from a spend­ing per­spec­tive are all there for an­other very good hol­i­day sea­son,” he said.

There's also been a change in the busiest com­merce shop­ping days for spe­cial­ity ap­parel. It used to be Satur­days, but now it's Tues­days and Wed­nes­days.

He added that it has had break­throughs in tech­nol­ogy, which will al­low it to track sales across the coun­try like mon­i­tor­ing the weather.

“In­stead of get­ting snap­shots that are out­dated the minute you print them, turn­ing things into stream­ing ser­vices so that you can see in the same way that you see a weather fore­cast ev­ery day. You're go­ing to be able to see a sales fore­cast for ev­ery mar­ket in the coun­try,” McNa­mara said.

“We have the ca­pa­bil­i­ties now to study weather like we haven't be­fore.”

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