Retired retail executive Terry Lundgren informed CNBC on Friday that increasing inflation will not be a point of stress in the clothing market.
Lundgren, previous executive chairman and president of Macy’s, stated in truth the market invites what he called a “modest” 5% boost in customer costs after a years of “nonexistent” clothing inflation.
“This is not a big concern for apparel retailers,” he stated on “Power Lunch.” “You’re talking about a few dollars going up in price. It’s not going to change the consumer’s mind in terms of purchasing.”
Lundgren’s remarks come amidst a background of enhancing retail sales and a fall in customer belief in the U.S. as the economy continues its healing.
Despite this, Lundgren stated the retail market is relying on suppressed need to sustain in clothing, stimulated by a year of Covid-19 lockdowns and customers’ costs power. He stays positive about the 2nd half of the year as schools resume and the nation goes back to some sense of normalcy.
Still, he acknowledged that the spread of the delta variation stays a danger to business if it goes uncontained.
“Apparel is an event-driven activity. If these events happening which we’re counting on for the fall season including back to school and including concerts and the like that’s really good news for apparel.”
The Department of Labor on Tuesday reported that clothing costs increased 0.7% in June, coming off a 1.2% boost the month prior. The clothing index, a part of the customer cost index, in June was up 4.9% when compared to a year earlier at the height of the coronavirus pandemic.
The Commerce Department on Friday reported that retail sales all of a sudden increased last month. The number increased 0.6% from May and 18% from June 2020. As for clothing and devices, customers invested 2.6% more in June compared to May and 47% compared to a year earlier.
Meanwhile, a University of Michigan study launched Friday discovered that customer belief in the U.S. dropped all of a sudden in early July. The initial outcomes revealed the customer belief index at 80.8, its most affordable read given that February and below 85.5 in June. Economists forecasted a July reading of 86.5, according to a Reuters study.
