Americans are shopping for clothes again, and it's good news for the economy
- Apparel sales grew by 7.9% between November 1 and December 24, the best growth rate since 2010, according to new data from Mastercard SpendingPulse.
- According to an expert, this boom in sales is being driven by three factors - shoppers spending more on themselves, the cold weather driving more winter purchases, and retailers maintaining better inventory levels, thus requiring less discounting.
Americans are buying clothes again.
According to new data from Mastercard SpendingPulse, consumers spent more on apparel this holiday season than they have the past eight years.
Read more: Retailers saw biggest increase in holiday sales since 2012
Apparel sales grew by 7.9% between November 1 and December 24, the best growth rate since 2010. In 2017, apparel sales were up by a more modest 2.7%.
This follows a strong sales run in the lead up to the holidays - apparel spending was up 5.4% over the Black Friday weekend, which is the highest growth rate since 2011, according to data from consulting firm Customer Growth Partners, reported by CNBC.
According to Neil Saunders, managing director of GlobalData Retail, this boom in apparel spending is being driven by three factors: a consumer who is more willing to splurge on themselves now than in the past, the cold weather driving more purchases of winter products, and retailers maintaining better inventory levels, which leads to fewer discounts.
According to GlobalData Retail's survey of 2,000 consumers' spending and purchases, 68% of people spent more on clothing for themselves this holiday season than they did over the same period last year. This is down to better selections in stores and people being more receptive to this, Saunders said in an email to Business Insider.
Retailers have also been hot on inventory levels this holiday season after excess stock led to heavy discounting in 2017.
Strong apparel spending signifies that consumers have confidence in the economy and are prepared to spend money on more frivolous purchases. In times of uncertainty, these are usually items that consumers first cut back on.
"When consumers splash out, it shows that they have money to spare and are confident enough to spend it on products," Saunders said.
US consumer confidence hit an 18-year high in October but cooled somewhat in November.