As children return to classrooms, stores expect strong sales
“The economy and consumer spending have proven to be much more resilient than initially forecasted,” Matthew Shay, president and CEO of the retail trade group, said in a statement. “The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity have put millions of Americans back to work.”
While NRF noted risks related to worker shortages, an overheating economy, tax increases and over-regulation, it pointed out that overall households are healthier, and consumers are showing their ability and willingness to spend.
The downside is that many retailers may not be able to fully capitalize on this sudden surge of spending. For many items produced overseas, stores had to place their orders at least six months ago, and they were conservative, says Steve Sadove, senior adviser for Mastercard and former CEO and chairman of Saks Inc. He also cited the logjam at ports, making it difficult for retailers to bring in goods to their stores.
“The supply chain is backed up. The ports are backed up,” he said. “You’re going to find scarcity.” He said that a number of retailers he has spoken to are having to air ship items instead of transport them by boat in order to have them in stores in time for back-to-school.
For this back-to-school season, Sadove said clothing should enjoy a stronger-than-expected rebound, with Mastercard SpendingPulse forecasting a 78.2% sales increase compared with last year. On a two-year basis, the figure is expected to be up 11.3%. Sadove said that retailers are seeing a shift in consumer spending toward trendier items like cropped tops and mini skirts.
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