Consumers Are Spending More — Just Not at Clothing Stores
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American shoppers are still spending their hard-earned dollars — just not at fashion apparel and accessories stores.
According to the Commerce Department, retail sales rose a seasonally adjusted 0.3% to $529.8 billion in January.However, sales at clothing stores fell 3.1% from December — marking the biggest month-over-month decline for the category since 2009.
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Shifting consumer demands and increasing competition from e-commerce players continue to put pressure on major chains, specialty brands and designer clothiers — many of which have faced slower foot traffic and resorted to widespread store closures. Last month alone, four big names in the fashion industry — Macy’s, JCPenney, Express and Opening Ceremony — announced plans to close multiple doors. Macy’s alone accounted for 125 planned store closures, with JCPenney, Express and Opening Ceremony having a combined 15 stores on the chopping block.
Retailers that manage to stay relevant amid the tough selling environment have experimented with digital and experiential offerings, which help retain customers as well as capture new demographics.
Meanwhile, the Commerce Department saw consumers forking over their money at other retail establishments: Sales at building material stores as well as restaurants and bars posted the largest gains — a respective 2.1% and 1.2% jump. Sporting goods stores grew a modest 0.1%, while nonstore retailers increased 0.3%. What’s more, general merchandise stores improved 0.5%, with department stores getting a 0.1% boost, and miscellaneous store retailers climbed 2.3%.
Trade tensions, worker shortages and fears of the spreading coronavirus that originated in China have plagued American companies and investors. However, Federal Reserve chairman Jerome Powell told lawmakers this week that the economy is “in a very good place” and “performing well.” Last month, the U.S. central bank kept interest rates at current levels between 1.50% to 1.75%.
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