Retail sales in the US dropped almost twice as much during April as it did in March, as the nation’s economy saw its first full month when most businesses were closed due to COVID-19 pandemic, stated the National Retail Federation (NRF)
“As predicted, retail sales were bad in April and lower than in March,” said Jack Kleinhenz, chief economist, NRF. “This should come as no surprise since April was the first full month when most businesses not considered essential were National Retail Federation closed, both in retail and across the economy. But month-to-month comparisons provide little insight other than indicating that most of the economy was on lockdown. Now that we’re in mid-May, many businesses are already starting to reopen. Relief payments and pent-up demand should provide some degree of post-shutdown rebound, but spending will be far from normal and maybe choppy going forward.”
In April, online and other non-store sales were up 21.2% year-over-year and up 8.4% month-over-month. Grocery and beverage stores were up 13.3% year-over-year, but down 13.1% month-over-month. Clothing and clothing accessory stores were down 89.3% year-over-year and down 78.8% month-over-month. Electronics and appliance stores were down 64.8% year-over-year and down 60.6% month-over-month. Furniture and home furnishings stores were down 66.3% year-over-year and down 58.7% month-over-month. Health and personal care stores were down 10.8% year-over-year and down 15.2% month-over-month.
“These retail sales numbers are not a surprise given the current state of affairs. The vast majority of retail stores have been closed, we are in the midst of historic unemployment and when it comes to personal finances, discretionary spending takes a back seat to essentials. Prior to this pandemic, retail was setting records in year-over-year growth, employment and investment. It is a resilient industry serving a smart consumer, and despite April report, we know it will be leading our nation’s economic recovery as this crisis recedes,” observed NRF President and CEO, Matthew Shay.
Overall, every category of retail except online was down on a monthly basis in April, including grocery stores and others that had seen a surge in March as consumers stocked up.
“I’m still of the opinion that we went into this with the economy on a sound footing and that we will hopefully come out of it the same. But we’re going to need more data to tell us whether the underpinnings of the economy have been damaged and how badly. We need to carefully watch the data and learn to understand what it is telling us,” Kleinhenz concluded.