NPD forecasts modest decline in Q4 apparel sales

Consumers are looking to stretch their budgets as they head into holiday sales.

Consumers’ financial concerns and economic uncertainties are expected to put a small dent in fourth-quarter apparel sales, according to The NPD Group.  With average prices forecasted to rise 2%, dollar sales are projected to fall by 1%, according to the NPD Group.

The most recent “Future of Apparel” report from NPD found that consumers increasingly plan to buy apparel tailored to a specific need. Sales of sweatshirts, outerwear and dresses are expected to grow in the fourth quarter versus last year.

“Wardrobe needs, stemming from replacement or replenishment purchases and a return to social gatherings, will prompt consumers to invest in certain aspects of their wardrobe this holiday season,” said Maria Rugolo, apparel industry analyst at NPD.

Along with being more selective in their purchases, many consumers are invoking cost-saving measures. Last quarter, 41% of consumers reported that they had to forgo buying apparel to purchase products in another category — an increase of 5 points since the beginning of the year. Consumers also said “lower prices” were the most important factor for their future apparel purchase decisions.

In addition, consumers are exploring alternative buying options. Nearly 45% bought apparel on a resale platform in the third quarter, rising 2 points since the first quarter.

“As brands and retailers kicked off holiday promotions before Halloween costumes were purchased, we can expect an elongated holiday selling season for the apparel industry,” said Rugolo. “In the face of rising prices, the fourth quarter will be a balancing act as shoppers prioritize the areas where they will trade down, pull back, or invest, causing them to be more prudent in their apparel spending.”