Apparel-oriented retailers continued in November to bear the scars of the share wars underway in the extremely promotional and hypercompetitive apparel retail market.
According to the U.S. Census Bureau’s advance monthly report released last week, total retail sales, which include gasoline, groceries and automobiles, were $465.5 billion in November—a respectable 3.8% increase over November 2015’s $448.7 billion. On a 12-month smoothed basis, sales rose 4.6%.
Apparel-centric channels failed to benefit from the gains, however.
Although clothing and accessories store sales managed to eke out a 0.9% increase to $21.4 billion, sales at department, chain and discount stores fell by 6.8% to $12.7 billion, bringing down the collective channel total, a reliable barometer of apparel retail sales, by 2.1% to $34.1 billion from $34.9 billion a year ago. On a 12-month smoothed basis, department store sales fell by 7 percent, and specialty store sales rose 1.3%, resulting in a collective decline of 1.6%.
Inventories are down across all key apparel channels this year as retailers seem to have successfully avoided the bloated inventories that wrought havoc on gross margin last year. Department store inventory in October (the most recent month for which data are available) fell by 6.6% compared to the same month last year, and specialty store inventory rose by only 0.5%. Inventory-to-sales ratios declined slightly for both channels.
Non-store retail sales, most of which is e-commerce, rose by almost 11 percent in November. Though growth has slowed in the sector in the past few months, most analysts are predicting significant share gains by pure-play e-commerce this holiday season.