Tuesday, February 7, 2023
Bringing the Latest in News Straight to Your Screen

With Retail Sales Up, Analysts Point To Pent-Up Demand

By News Creatives Authors , in Business , at January 1, 1970

Business at the Chicago Gold Coast boutique Space 519 is so good, the owner calls it the new “Roaring Twenties.”

“People are splurging on things that make them feel good,” says Lance Lawson, who co-owns the retail store with Jim Wetzel. One such item, a $595 black taffeta bow blouse by Paris-based Patou has been reordered several times—this season.


 “It sells out within days. We are selling out of more expensive items, but this is the one that just keeps flying out again and again.”

Like many retailers, the retail owner was conservative planning for the year and so were suppliers, he noted. Now that consumers are shopping, demand is way up.

“Certain categories like fine jewelry are seeing business up 100% vs pre-pandemic level,” Lawson says. “And our cafe is completely booked every day with a waiting list.”

Retail spending is one indication of a country-wide spending trend amongst Americans who can afford to shop. Case in point: retail sales were up .6% in June, according to the latest report released by the Census Bureau. Monthly sales totaled $621.3 billion, up 18% above June 2020. Sales from April to June tracked a 31.5% increase from the same period last year.

According to the report, top-performing categories in June included clothing and clothing accessories stores, up 47.1% from June 2020 and food services and drinking places up 40.2% from last year. In contrast, furniture and home furnishing stores dropped 3.6%, motor vehicle and auto parts declined 2% and building material and garden equipment dipped 1.6%.

Analysts point this surge in retail spending to pent-up demand.

“Consumers are starting to put to work some of the pent-up $2.5 trillion or so in savings accumulated during the pandemic,” says Tyler Higgins, head of retail practice at the global consulting firm AArete.

“This is evidenced by the whopping 18 percent year over increase, this June over last, in overall retail spend, albeit we’re comparing June 2021 to the depressed sales levels of June 2020.”

The economy may still be in transition, but analysts say the report is evidence that things are moving in a healthy direction.

“Consumers and the economy are doing well,” says Ted Rossman, senior industry analyst at CreditCards.com. “While retail sales have leveled off since March, they’ve plateaued at a high level. And they’ve done it without stimulus these past three months.”


Post-pandemic spending may reflect revenge spending or a lack of experiential spending, says Marie Driscoll, managing director of Luxury and Fashion at Coresight Research, an advisory and research firm.

“As purchasing luxury goods itself can be experiential for many shoppers, trading up and practicing a buy-less, buy-better form of sustainability takes the place of ‘experiences,’” Driscoll says. “Add to this the positive impact of a wealth effect reflecting a strong stock market and rising home prices and the stars are aligned for a booming luxury market, whether it be jewelry, small leather goods, handbags or footwear—designer sneakers and high heels.”

Designer apparel and ready-to-wear suffered throughout the pandemic as people stayed at home, yet these categories are expected to continue to return in a big way as people head back to the office this fall.


The “wealth effect,” Driscoll says, has benefitted people across the income spectrum. Designer and luxury brands may feel a positive effect.

“With the government injecting massive amounts of stimulus through the Economic Impact payments, individuals earning less than the median income have had a financial lift,” Driscoll says.

“The middle class has traded up for aspirational brands and items, and the wealthy have also been spending on luxury goods. I see lines outside most luxury brands in the malls I’ve visited and here in NYC flagships, and those forming the lines are not the 1% nor the 10%—luxury has been democratized.”

Beyond retail, the worlds of luxury travel are booming—another indication that consumers are ready to spend for experiences.

“Rental rates in the Hamptons are up double-digit year over year and people are jetting to the islands too,” Driscoll notes.



Leave a Reply

Your email address will not be published. Required fields are marked *