Easter And Spring Season Refresh U.S. Retail Spending

Demand for the latest fashion trends is always strong in the weeks leading up to Easter, a time when retailers are still selling the season’s must-have Spring items at full price. Easter Sunday this year is April 4. The fact that consumers still appear to be willing to buy the latest fashion items now rather than waiting for a discount later, despite being mostly at home during the Covid-19 pandemic, is an encouraging sign for the retail industry.

Easter is one of the largest retail buying holidays. In addition to the traditional Easter eggs and holiday-related groceries, the end of winter and the arrival of warmer weather make consumers eager to update their closets and acquire new clothes that reflect the latest styles before gathering for the holidays with family and friends.

The situation bodes well for the economy since stimulus checks just arrived in people’s bank accounts, and consumers are spending despite the pandemic and other headwinds. Easter is one time of year that consumers generally accept paying full price. There is a sense of spring freshness and customers want the latest looks.

To analyze what consumers are buying, we looked at the data for the four weeks leading into Easter 2021 and then identified which categories saw items sold-out at full-price. For this, Refinitiv partnered with StyleSage Co., which analyzes retailers, brands, online trends, and products across the globe to track the average discount percentage and how much of the retail assortment is on sale and selling out at full-price going into the Easter holiday week.

Here are some highlights as we head into this year’s Easter holiday season:

  • The current average promotional discount for online stores has dropped below the 2020 pandemic level. This suggests that retailers have become less promotional online in 2021.
  • Discounts have been trending downwards for most retailers with the exception of mid-tier department stores, where discounts have been trending up.
  • March’s weather, significantly warmer than usual throughout much of the United States, boosted pent-up demand for the spring must-have clothing items early in the season.
  • As a result, skirts have been the number one item flying off the shelves at full-price (Exhibit 3). The other sold-out items include jumpsuits, dresses, jackets, and blazers, which have sold out online at Mango, H&M, Forever 21, American Eagle.
  • March included spring break when teenagers also flocked online to stores like American Eagle. As a result, our proprietary StarMine SmartEstimate score shows that this teen retailer is likely to post earnings for the first quarter of 2021 that are higher than the current consensus estimate.
  • The next best performing sector includes footwear sold at full-price, which is propelling sales at retailers where apparel is the main focus.
  • Within the beauty category, high-end shaving products are selling out including at Nordstrom and Neiman Marcus.
  • Consumers are paying full-price for kitchen appliances, followed by outdoor/patio merchandise. This is benefitting Target, Costco, and Kohl’s.
  • All three retailers are expected to see robust Q1 same store sales growth of 7.5%, 12.3%, 52.0%, respectively.
  • Moreover, the StarMine data also show that a few names are likely to beat their Q1 2021 earnings estimates and post a positive surprises, including Bed Bath and Beyond, and Williams Sonoma.
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