NEW YORK — Americans’ spending on women’s apparel is likely to slow sharply in the remaining months of 2006, resulting in a modest full-year increase of roughly 2 to 3 percent, consumer analysts are forecasting.
That would be about in line with annual spending increases for the past 10 years, which have typically ranged between 3 and 4 percent for such items.
A 2 to 3 percent advance would represent a steep drop from robust growth of 7.2 percent in the 12 months ended June 30, when spending totaled $105.8 billion, according to NPD Group.
Citing emotional and economic considerations as catalysts for the anticipated weakening in spending, Marshal Cohen, NPD Group’s chief industry analyst, projected, “As quickly as it grew to 7 percent, it’ll turn around to 2 percent.”
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Such a decline in the growth rate would put Americans’ calendar-year expenditures on women’s clothing at between $97.4 billion and $97.9 billion for 2006, up from the $95 billion spent in 2005.
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NPD’s outlook concurs with that of America’s Research Group, where chairman C. Britt Beemer is estimating consumption of women’s apparel will edge up by 2 to 3 percent in 2006. “If gasoline prices get under $2.20 a gallon, you’ll see consumers splurge on discretionary items,” Beemer added, noting gas prices were averaging about $2.60 a gallon. “Not that they’ll be wild, but they might buy one or two new outfits.”
Currently, an “anything goes” feeling about fashion is feeding an appetite to refresh wardrobes with some new items — often accessories or footwear — rather than rebuilding apparel wardrobes on a broad scale, a sensibility that will probably produce only a modest increase in spending on clothes for the full year, Cohen forecast.
Also likely to constrict purchasing of women’s wear, analysts posited, is a sense among many consumers that they aren’t any wealthier this year than last, as various costs of living spiral higher than the 2.5 percent average pay raise for 2006. Indeed, asked in August how higher gas prices had affected their spending, about one-third of the 5,983 women 18 and older surveyed by BigResearch said they were spending less on apparel. The inclination to budget less money for clothes varied only in degree across three income brackets — including women with annual incomes of $75,000 or more, among whom roughly 25 percent said they were cutting back.
However, in September their outlook brightened, in part because of lower gas prices, as women anticipated their outlays for dress and casualwear from September through October will be more than in the prior-year period, BigResearch found.
The strongest growth in apparel purchasing in the 12 months ended in June was registered by 55- to 64-year-olds, who expended 20 percent more than they did a year earlier, totaling $12.5 billion, NPD found. But it was adults ages 18 to 24 who dished out the most dollars for clothes, or $18.8 billion, in the recent 12-month period, up 7.2 percent from $17.5 billion. The proliferation of lower-priced electronics, such as $34 DVD players and $399 laptop computers, is freeing up money that young adults can then use to buy apparel, Cohen noted.
More broadly, cost increases of $15 to $20 a week on groceries alone are leaving less money in many households for items like apparel, particularly among females, who are usually a household’s primary shopper, Beemer observed. “If people are spending $60 to $80 a month more on groceries and 40 percent more on gasoline [in August] than they were 18 months [earlier],” he said, “it takes a big bite out of their budgets.”