Apparel retailers aren’t in the tumult they were this time last year, but projections of pent-up consumer demand materializing and a full-scale reopening this summer may still be uncertain.
With the Commerce Department’s report Friday that retail sales were stagnant in April compared to the previous month, and some contention around the Centers for Disease Control’s latest guidance advising that fully vaccinated people can “resume activities that you did prior to the pandemic,” there are still doubts about apparel retail’s prospects for a more robust recovery this year.
Some are skeptical of the theory of pent-up demand that projects consumers will return to malls in droves after an unusual period of being homebound. It’s likely that routines of the pandemic have shifted consumer shopping habits in more lasting ways, said Ralph Anzivino, professor of law at Marquette University Law School.
“I don’t know if I see some big boom coming for the apparel industry,” he said. “I think a lot of people dealing with this pandemic have established their buying patterns.”
A somewhat related indicator of consumers’ appetite for discretionary spending, restaurant spending, was up a slight 3 percent in April, after taking a major hit in 2020 with some 17 percent of restaurants in the U.S. closing down, according to the National Restaurant Association.
“People are already accustomed to what’s been going on,” Anzivino said. “There may be a modest or a tiny change, but I don’t see anything big.”
Friday’s retail sales report indicated slight drops in sales from March at department stores as well as apparel and accessories stores. The CDC’s guidance, meanwhile, that “fully vaccinated people can resume activities without wearing a mask or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance, has been met with consternation from some in the medical and epidemiology communities.
The COVID-19 pandemic is still ongoing, and although cases in the U.S. have been declining for months, there are still 38,087 new reported cases and roughly 800 deaths daily on average. Only 36.2 percent of the U.S. population has been fully vaccinated so far, and there are still questions around the spread of potential variants in other parts of the world, including India, which is in the midst of a devastating surge.
The retail lobby group National Retail Federation expressed optimism over Friday’s results, attributing the jolt to sales in March to a reaction to stimulus checks that were sent out as part of President Biden’s American Rescue Plan Act of 2021.
“Consumers may have tapped the brakes slightly in April compared with March, but it was like going from 100 mph to 85 mph compared with last year,” NRF chief economist Jack Kleinhenz said in a statement. “The fuel from stimulus checks gave a strong boost to spending in March and the fact that April numbers are very close shows spending is clearly going forward and still strong.”
The current lull in retail bankruptcies is expected to continue, as retail’s lenders keep a close watch on companies’ lines of credit.
By: ssundarwwd
