Department Stores, Clothing and Accessories Boost June Retail Sales

In June, consumers continued to emerge from their pandemic-related spending hesitancy and spent much of their dollars buying clothes and accessories as well as dining at restaurants, the government said today.

Retail sales rose 0.6% month over month to $621.3 billion and increased 18% compared with June 2020, the Department of Commerce said in its monthly report. Sales from April through June rose 35.1%, while the spending decline previously seen from April to May was revised to a decrease of 1.7% — from a decline of 1.3% — the government figures show.

Sales at retail rose 6.2% in June from the prior month to $550.8 billion, an increase of 15.6% from a year ago. Clothing and clothing accessories store sales rose 47.1% in the month to $25.9 billion compared with a year ago, while at food services and drinking places, sales popped 40.2% to $70.6 billion from 2020 levels.

Month over month, clothing and clothing accessories store sales rose 2.6%, and at department stores, sales increased 5.9%. Year over year, department store sales increased 24.4%.

“Retail sales are likely to gain momentum through the end of the summer. Consumers are eager to spend and this enthusiasm will likely continue throughout the remainder of the year,” said Natalie Kotlyar, national leader of the retail and consumer products practice at BDO, a financial services firm. “Students returning to school and employees returning to in-person work opens an opportunity for an increase in demand, especially from those who are looking for an apparel or technology refresh.”

Retailers, however, will have to find ways to keep up with demand as supply and labor issues continue, noted Kotlyar. Consumers will also have to bear the brunt of inflation that is growing at its fastest pace since August 2008.

Luckily for retailers, a recent Deloitte survey found that about 73% of consumers feel comfortable going back into stores as of May 27. “As the role of the physical store evolves to meet shifting demand, retailers must fight for the attention of the energized consumer and capitalize on Americans’ renewed desire for social connection while providing them with the products and services they expect in the shopping modality they prefer,” the Deloitte report said.

Kotlyar added that she expects consumers to start their holiday shopping earlier given the supply issues seen last holiday.

“This will require adequate planning from retailers, including proper demand forecasting, a digitized supply chain and upgraded in-store capabilities to coincide with online shopping experiences,” she said. “Consumers are prioritizing service, product selection and cost, and for retailers to be successful this holiday season, all three need to be present and balanced.”

The National Retail Federation expects full year retail sales to increase 10.5% to 13.5% from 2020 to $4.4 trillion to $4.56 trillion.

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