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June Retail Data Show Flat Apparel Sales

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Retail sales were sluggish in June, causing concern among economists who were hoping that the improving job market and uptick in consumer confidence would help stimulate consumer spending. Within key apparel channels, department stores suffered a drop, while specialty store sales increased.

Total retail sales rose by 1.4% compared to last June, to $442 billion, according to data released Tuesday by the U.S. Department of Commerce. On a 12-month smoothed basis, sales were up 1.8%, helped by a still-robust automobile sector, where sales increased by over 6 percent. Excluding autos, retail sales grew by a paltry 0.7%.

Sales at restaurants enjoyed the biggest increase, up 6.5% on a 12-month smoothed basis.


Sales at department, chain and discount stores dropped by 1.8% on a smoothed basis, a steeper decline than May’s 1 percent drop.


Apparel specialty stores enjoyed an increase, rising by 1.2%, though this was a much smaller gain than May’s 4.8% increase. Declining prices are no doubt playing a big role here, given the increasingly promotional environment and rising influence of fast fashion players.


For the combined department and specialty sector, a barometer of overall apparel sales, sales were flat in the month.


For the first half of 2015, apparel specialty stores enjoyed a 2.5% increase in sales, while department and discount stores saw sales fall by 1.8%.  

Inventory levels for apparel and department stores started to fall, however, no doubt helped by the investment in omnichannel systems that are giving retailers better visibility and control over stock. In May, the most recent month for which inventory data are available, the inventory to sales ratio for department stores declined from 2.13 to 2.06, and edged down from 2.48 to 2.44 for apparel specialty stores.  


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