Apparel Depresses Retail Sales Growth in October Department, discount, and chain stores fall and specialty apparel slows

Total retail sales growth slowed in October, led by slowing of key apparel channels and reversing the trend of the prior three months, according to just-released government figures. Sales grew 3.6% on a 12-month smoothed basis, below September’s 5% growth rate, but better than August’s 3.4% increase.

Autos had a smaller impact in October than in previous months. Taking autos out of the mix, total retail sales increased by 3.4% – very close to the total growth rate. Gas stations continued to post record sales.
Total retail inventory surged by 7.9% in September (the most recent month for which this measure is available), its smallest increase in four months. Inventory-to-sales ratios fell for all key retail channels.

Department, discount and chain store sales fell in October for the fourth straight month. Big store inventory dropped by 7.2%, its biggest monthly dip in over three years, and the inventory-to-sales ratio fell slightly.

Specialty apparel store sales growth slowed to 4% in October from the over 5% growth rates the channel enjoyed from July through September, but continues to outpace growth at department stores. September inventory rose by 4.9% as stores stocked up in advance of the holiday season. Inventory to sales ratio edged down slightly in September.

The combined department, chain, discount and apparel specialty retail sector, a fairly reliable barometer of total apparel sales, enjoyed a sales improvement of only 1.8% on a 12-month smoothed basis, well below the prior month’s 2.5% gain, due to the softness in both the specialty and big store sectors.