Business at Chicago Gold Coast’s Space 519 boutique is so good the owner calls it the new “Roaring Twenties.”
“People splurge on things that make them feel good,” says Lance Lawson, co-owner of the retail store with Jim Wetzel. One such item, a $ 595 black taffeta bow blouse from Paris-based Patou, has been ordered multiple times this season.
“It sells out in a few days. We sell more expensive items, but this is the one that keeps stealing over and over again.
Like many retailers, the retailer’s owner had careful planning for the year, as did the suppliers, he noted. Now that consumers are shopping, demand is on the rise.
“Certain categories like fine jewelry are seeing their turnover increase by 100% from the pre-pandemic level,” Lawson said. “And our cafe is full every day with a waiting list.”
Retail spending is an indication of a nationwide spending trend among Americans who can afford to shop. Case in point: Retail sales rose 0.6% in June, according to the latest report released by the Census Bureau. Monthly sales totaled $ 621.3 billion, up 18% from June 2020. Sales from April to June were up 31.5% from the same period last year.
The 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%, according to the report. compared to last year. In contrast, furniture and home furnishings stores fell 3.6%, motor vehicles and parts fell 2%, and building materials and garden equipment fell 1.6% .
Analysts point to this increase in pent-up retail spending.
“Consumers are starting to leverage some of the estimated $ 2.5 trillion in savings accumulated during the pandemic,” said Tyler Higgins, head of retail practices at global consulting firm AArete.
“This is evidenced by the huge 18% year-over-year increase in overall retail spending last June, although we compare June 2021 to the depressed sales levels of June 2020.”
The economy may still be in transition, but analysts say the report is proof that things are moving in the right direction.
“Consumers and the economy are doing well,” said Ted Rossman, senior industry analyst at CreditCards.com. “While retail sales have stabilized since March, they have leveled off at a high level. And they’ve done it without stimulus for the past three months.
Post-pandemic spending may reflect revenge spending or a lack of experiential spending, says Marie Driscoll, general manager of luxury and fashion at Coresight Research, a research and consulting firm.
“As buying luxury goods in and of itself can be an experience for many buyers, trading and practicing a form of sustainability without buying, but with a better buy replaces ‘experiences,’ explains Driscoll. “Add to that the positive impact of a wealth effect reflecting a strong stock market and rising real estate prices and the stars are aligned for a booming luxury market, be it jewelry. , small leather goods, handbags or shoes – designer sneakers and high heels. “
Designer clothing and ready-to-wear have suffered throughout the pandemic as people have stayed at home, but those categories are expected to continue to make significant returns as people return to the office this fall.
The “wealth effect,” says Driscoll, has benefited people at all income levels. Designer and luxury brands can feel a positive effect.
“With the government injecting massive amounts of stimulus through Economic Impact Payments, people earning less than the median income have enjoyed a financial boost,” Driscoll said.
“The middle class swapped for ambitious brands and items, and the rich also spent on luxury goods. I see lines outside most luxury brands in the malls I have visited and here in the New York flagships, and the ones that make up the lines are neither the 1% nor the 10%: luxury democratized.
Beyond retail, the world of luxury travel is booming, another indication that consumers are willing to spend on experiences.
“Rental rates in the Hamptons are up double digits year over year and people are flocking to the islands as well,” Driscoll notes.