If you had asked me a month ago what the upcoming holiday season was going to look like and the outlook for 2022, I would have said it was going to be sensational. People were anxiously awaiting the opportunity to open their wallets and pocketbooks and start spending again. Retailers around the country would be willing and able to take all the business and then some. Even in the face of all the shifts in the retail landscape, i.e., the rise of consumer demands and e-commerce trends, inventory visibility and efficiency as well as many other issues to address, we were on the bandwagon that this was going to be a banner season. We understand that it has been a very difficult time for retailers and today’s economic news continues to show the challenges. Shoppers in the U.S. cut back their purchases in July even more than expected as worries over the delta variant of Covid-19 dampened activity and government stimulus dried up.
Retail sales for the month fell 1.1%, worse than the Dow Jones estimate of a 0.3% decline and below the upwardly revised 0.7% increase in June. Consumers make up nearly 70% of all activity in the U.S., so retail sales are watched closely as a gauge to overall economic health. Most of the monthly decline came from motor vehicles and parts dealers, which fell 3.9%. The auto sector has been a major contributor to the inflation surge in 2021, with used car prices jumping higher amid swelling demand.
But the declines were seen elsewhere too. Clothing stores saw a 2.6% decline, and sporting goods, musical instrument and book stores fell 1.9%. Online sales also posted a 3.1% drop. Now the numbers are obviously better than July sales in 2020, but the point is that the roller coaster ride for the retail industry continues.
Flexibility for the retail industry will continue to be the difference between winning and losing. Flexibility in how they deal with inventory, consumer expectations, payment methods, employee demands and so on. Will every retailer get it right? Doubtful. Will every consumer want be fulfilled? Again, doubtful. Will there be lots of people trying to figure it out and quickly? Absolutely. Hopefully this is only a small bump in the road to recovery and the holiday season will in fact be sensational, glorious and most of all, profitable.
About AKCEL Partners: AKCEL Partners is a sales consultancy founded by three executives with strong bonds throughout the textile, apparel, brand and retail industries. AKCEL Partners offers strategic sales planning combined with experienced, highly networked sales professionals who give clients immediate access to targeted decision-makers. We are dedicated to meeting or exceeding our clients’ short- and long-term revenue goals. To learn more, go to www.AKCELPartners.com.
