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Apparel Drags Retail Sales Down in May

Although retail sales growth in April wasn’t anything to get excited about, it certainly beat May’s sluggish showing, according to data released this morning by the U.S. Department of Commerce. Total retail sales rose by a seasonally adjusted 4.3% in May, below April’s 4.4% increase. Once again, automobile dealers reaped most of the benefit, since after excluding cars from the mix, retail sales increased by a tepid 1.9%. Building supply and garden stores also got a nice spike in seasonal demand.

Total retail inventory rose by 4 percent in April, the most recent month for which inventory data are available, and its smallest monthly increase in a year.


The department, chain and discount store sector, which includes Macy’s, Sears, J.C. Penney, Walmart and many others, suffered its twenty-sixth straight decline, with sales down by 2.9%, compared with flat sales in April. Big store inventory dropped by 5.6%, causing the inventory-to-sales ratio in the channel to decline slightly.


Apparel specialty store sales growth edged into positive territory with a 0.5% increase. This sector, which includes brands like Gap, J.Crew, and Ann Taylor, continued to fare better than department and discount stores, a trend that is expected to continue through this year as consumers gravitate toward their easy-to-navigate stores and e-commerce sites. Specialty store inventories dipped by 3 percent in April, and the sales to inventory ratio edged down slightly as well.


Sales at the combined department, chain, discount and apparel specialty retail sectors, a traditionally reliable barometer of total apparel sales, fell by almost 1 percent in May on a 12-month smoothed basis. March inventories for the combined sectors fell by 4 percent, more than March’s 3 percent drop.


April sales got a boost from the late Easter and long-awaited arrival of Spring weather, which drove consumers into stores looking to refresh their wardrobes. However, it seems as if May caused them to revert to their “new normal” behavior, of treating apparel like a commodity and only buying when absolutely necessary (and when it’s on sale).