What was the last item you splurged on? Was it a pair of shoes? Or maybe a smartphone? It seems consumers are now spending more on cell phones and less on clothes.
And this could spell trouble for such retailers as Macy’s, J.C. Penney, and Kohl’s, all of which reported not so good results this week.
While there are many factors are for the drop on sales, like delayed inventory shipments, bad weather in February, there is no denying Americans are buying things other than clothing. The U.S. consumer is spending less and less on clothes and home furnishings.
According to a recent report by Morgan Stanley, millennials are spending more on expenses like rent, cell phones, and personal services than young people a decade ago, reports Business Insider. After spending on these items there is little left for clothes.
Apparel is losing out to electronics and online subscriptions, Macy’s CFO Karen Hoguet said at a recent conference covered by MarketWatch.
“I think part of that is the customers are buying other things, whether the electronics, cable services, Netflix, whatever,” Hoguet said.
In a call with investors Hoguet said, “Shoppers are spending more of their disposable dollars on categories we don’t sell, like cars, healthcare, electronics, and home improvement.”