By Dr. Michael Haydock
It’s that time of year again – the back to school season. Summer is coming to a close, days are getting shorter and parents are sending their kids back to the classroom. But what does that mean for retailers? My quarterly retail forecast shows a strong back to school season and parents with bigger, more confident wallets.
The economy is continuing to improve, slowly but steadily, with the unemployment rate decreasing at around 6 percent, although not yet reaching pre-recessions levels. Consumer confidence in the third quarter is the highest it’s been in eight years – people are confident in their future, income, and prospects – which means they are more likely to spend at the store.
This is big news for retailers being that they took a big hit early this year as treacherous weather kept people from shopping. Luckily, as spring began rolling in, so did demand. The second quarter saw increases in almost every retail category with men and women’s clothing really turning up the volume. With back to school, we continue to see growth year-over-year in most clothing categories as well health, beauty, and consumer electronics.
While household appliance growth is a bit stunted due to a continually weakened housing market, we’ve seen incredible growth in jewelry in the third quarter, which can be attributed to the value of gold.
Overall, the third quarter showed retails sales up almost 5 percent year-over-year, which is nearly double the growth the overall economy is experiencing.
This quarterly forecast takes data from the US Census Bureau, who captures total sales observations from over 46,000 retail establishments in North American monthly from 1992 to the present. With this depth of data at our fingertips, we are able to predict trends with 99 percent accuracy.
As we turn a corner from back to school to the holiday season, I see a few more winners on the horizon, including consumer electronics. Children’s clothing was a big hit for last year’s holiday season and I predict consumer electronics will be the number one item on this year’s wish lists.
All in all 2014 had a tough start for retailers with really poor weather conditions through most of the country in the first quarter, but should finish strong. With consumer confidence reaching new heights, people will be hitting the shops early and often, and won’t be afraid to spend.