After a busy back-to-school shopping period in August, retail sales slumped a bit in September. According to Euclid's monthly benchmark report, traffic decreased substantially compared to last year, down 17 percent compared to September 2013.
Overall, the industry saw a 0.5 percent growth year-over-year in general merchandise, apparel, furniture and other retail sales. Storefront conversion was up slightly due to higher consumer confidence compared to the period of the government shutdown in 2013.
Despite the dip in retail for September, Euclid Data Scientist Breton Birkhofer does not believe this is indicative of holiday season sales performances. "We expect spending activity will rebound and retail will see healthy year-over-year growth as a result of steadily improving economic fundamentals. We anticipate these macro conditions will have a positive influence on traffic and in-store engagement, ultimately driving sales."
Heading into the holidays, most retailers agree with Birkhofer and are feeling optimistic. In fact, almost one-quarter of retailers predict at least a 5 percent increase, if not more, of year-over-year sales for this upcoming holiday season. Another positive outlook is reflected in retailers' seasonal hirings. Macy's (NYSE:M) said it plans to hire around 86,000 seasonal positions, an increase of 3.6 percent from the number of employees it hired in 2013. Earlier this month, Walmart (NYSE:WMT) said it will hire 10 percent more holiday employees–around 60,000 total–compared to last year. And Kohl's (NYSE:KSS) is adding 34 percent more seasonal workers–a total of 67,000.
What lessons can retailers take away from this year's post BTS slump? According to Birkhofer, one lesson is that it can be a challenge to wean shoppers off of the deep discounts that they have come to expect in the promotional months.
"Some retailers pulled back on promotions in September and saw sales growth slow," said Birkhofer. "Some of the other challenges faced in September were external factors that cannot be fully planned for and mitigated. Irregular weather patterns, including significant temperature disparity across regions and weeks, led to uneven traffic patterns."
-See this Euclid report
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