In One Chart: It’s not just inflation. People aren’t visiting clothing stores like they used to because they’re sick of loungewear.

by | Aug 26, 2022 | Stock Market

As many segments of the economy roar back from pandemic-driven slumps, consumers still aren’t returning to stores like they used to. Sluggish traffic continues to dog apparel retailers, which are now sitting on large piles of inventory that they have to discount in order to sell. Walmart Inc.
WMT,
+0.67%
and Nordstrom Inc.
JWN,
-0.81%
are among major companies that have announced plans to mark down items in order to clear the shelves. Don’t miss: Here’s what the big inventory problem for retailers looks like

Despite talk of inflationary pressures on consumers, one key issue for apparel retailers at the moment is simply that shoppers don’t want to buy the sorts of things they have in stock, according to R.J. Hottovy, the head of analytical research at Placer.ai, which uses location data to generate traffic insights. The inventory that came in was more geared to last year’s trends, and by the time it arrived, “consumer mindset had shifted to more occasion wear,” he told MarketWatch. There’s been a “definite shift from goods to services,” and when people do buy clothes, they want to dress up for occasions out of town, he said. In contrast, the inventory coming in “was pandemic wear,” or lounge clothes. See more: We’re done with pajamas. What we need is luggage. Macy’s sales show how consumer behavior is changing. The disconnect between shopper needs and available inventory is weighing on traffic trends, Hottovy continued. Retailers plan inventory “usually a year out, if not more,” he said.

Of course, trends change quickly. Morgan Stanley analyst Kimberly Greenberger highlighted earlier this week that Nordstrom “merchandise skews heavily to wear-to-work and special occasion.” The company has benefited as shoppers load up on new office wear after having “over-spent” on more casual areas of clothing last year, but she wo …

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