By Neil Saunders
The final quarter of the year is when retail starts to lap some tougher comparatives from 2017. However, the results from October suggest that the sector is still capable of producing impressive levels of growth. This month’s numbers will also allay fears that the consumer economy is starting to slow down.
High levels of consumer confidence, optimism about the future, and gains in wages have all helped to boost spending, even against a backdrop of inflation from elevated gas prices. This dynamic is broad-based, with almost all income groups willing and able to spend more.
High levels of consumer confidence, optimism about the future, and gains in wages have all helped to boost spending.
A telling sign of elevated consumer confidence is the degree to which people are prepared to buy indulgences. Our own data suggest that consumers are still splashing out on treats for themselves in categories like apparel and beauty. This, along with a colder snap of weather, is why sales at clothing stores rose by a solid 4.7% in October.
Bigger ticket sectors also fared well, with home improvement sales up 6.5% and furniture and home furnishings by 3.2%. Repairs following a number of recent natural disasters aided the former but so too did an increased level of activity on home projects and refurbishments.
The final two months of retail are the most important in the calendar. Fortunately, consumers go into this period in a good position. All the evidence points to this being a successful holiday season for the retail sector.
Neil Saunders is managing director of research firm GlobalData Retail.