"There is plenty of evidence that the second half will be better for the [retail] industry as consumers begin to feel more optimistic about their spending decisions," said Jack Kleinhenz, Cleveland-based chief economist for the National Retail Federation.
CLEVELAND, Ohio -- Jack Kleinhenz, the Cleveland-based chief economist for the National Retail Federation, has lowered his retail forecast for 2014 because of less-than-stellar sales in the first half. But he and the retail federation expect business to pick up by at least 3.9 percent for the rest of the year, as shoppers hit stores ready to spend, spend, spend.
Clik here to view.
View full sizeChief Economist Jack Kleinhenz Kleinhenz, who had said in January that retail sales would rise 4.1 percent this year, compared to 3.7 percent last year, now says this year's growth will be closer to 3.6 percent. That includes store sales but excludes automobiles, gas stations and restaurants.
Despite the slow start to the year, which he blamed primarily on nasty weather, "there is plenty of evidence that the second half will be better for the industry as consumers begin to feel more optimistic about their spending decisions."
He said the economic outlook remains bright despite the mixed signals coming from the housing market, consumers' reluctance to use credit cards, and still-high prices for food and energy. "
"Employment has grown at its strongest pace since 2005, business and consumer confidence have edged higher, manufacturing activity has expanded and inflation pressures remain tame, improving expectations for the second and third quarters," he said.
Matthew Shay, president and chief executive of the National Retail Federation, said that the leaders of the largest retailers in America -- even the ones who have cited challenges within their companies or among their consumers -- say that they are by and large looking forward to the second half of the year. "The positive message is how strong we think the second half of the year will be," he said.
Clik here to view.
View full sizeRR Freestyle owner Rick Rasgaitis delayed putting out his summer clothing and has postponed his fall collection for a few weeks. Retailers have started their back-to-school promotions and television commercials even earlier this year, in response to consumers who say this is when they want to start shopping, and will be looking for great deals at their favorite stores, he said.
Kim Crow, owner of Evie Lou, an upscale women's boutique in Cleveland's Tremont neighborhood, said sales at her shop have already surpassed last year's record 30-percent growth. Not only did she launch her evielou.com website last year, but she also moved into a much bigger retail space, both of which are paying off now.
"We've been having a really fantastic year," she said. "We're up 25 percent so far this year."
"Weather's always had an impact on our business, because we're not in an enclosed mall," Crow said. But when the weather was crummy, shoppers turned to her website and still bought. "Not local people, it's always out-of-state, from California and places like that," she said. But online sales now make up about 20 percent of her business.
Crow said she's also lucky to be in Tremont, because when residents have friends visit, they often bring them over to walk around and explore local stores. "This is sort of a unique spot in Cleveland," she said. "Some days we're really slow, but then one person comes in and you have a fabulous day because she comes in in the mood to shop."
Clik here to view.
View full sizeRR Freestyle owner Rick Rasgaitis says sales have been good this summer and he is optimistic for fall. Rick Rasgaitis, owner of the 27-year-old RR Freestyle men's clothing store in Westlake, said he, too, is optimistic. "I anticipate a fairly strong start to the fall season, because upscale fashion customers start early," he said.
Customers are being more selective about what they buy, favoring the kinds of clothes they might wear out to a nice restaurant over more formal business attire. "At the same time, if you offer your customer an interesting, quality product that they like, then price becomes secondary," he added.
With the brutal winter, some people bought coats and cold-weather clothing as late as March, so Rasgaitis delayed putting out his summer clothing and has postponed his fall collection for a few weeks to compensate.
"It should be much better [this winter], but again it depends on the weather," he said. "If we have a really warm fall, that will affect sales of outerwear, sweaters and several other products."
Clik here to view.
View full sizeMar-Lou Shoes owner Daniel Ungar has ordered 30 percent more boots for this winter, and is looking forward to his best sales in 56 years. Daniel Ungar, second-generation owner of Mar-Lou Shoes in Lyndhurst, said he, too, is looking forward to a better rest of the year. "We got absolutely, incredibly hammered because of winter weather in the first and second quarter," he said. "It was really a crazy, crazy time -- we sold out of boots by the middle of February."
So he's ordered 30 percent more for this fall, from fashion boots to heavy-duty winter boots, "and we've already sold several pairs in the middle of July," he marveled.
Mar-Lou started out as a shoe store for hard-to-find sizes, from women's sizes 5 to 14, from narrow to EEEE, and men's sizes 7 to 20, narrow to EEEEEE. But it has developed a following among those with mainstream shoe sizes looking for shoes that are both attractive to look at and comfortable to wear, he said. He expects to sell nearly as many regular-sized boots as extra-extra large ones.
Ungar attributes that to two factors: "Because they just got kicked in the butt with a harsh Cleveland winter and it's just on their minds, followed closely by the fact that the economy's better." He said that even though people in the shoe business have a tendency to over-buy, he is fully confident that this coming winter will be his best in 57 years.
"Watch, I'll say that and we're going to have a nice, soft, easy, mild winter," he said.