If anyone is surprised by the latest retail sales numbers emerging from America’s data banks they must have been more deeply quarantined than the rest of us for sure. The numbers aren’t remotely pretty, but they also were not at all unexpected.
The National Retail Federation reports today that retail sales dropped nearly twice as much during April as they did in March as the nation’s economy saw its first full month when most businesses were shut down because of the coronavirus pandemic.
National Retail Federation Chief Economist Jack Kleinhenz says, “As predicted, retail sales were bad in April and lower than in March,” and adds, “This should come as no surprise since April was the first full month when most businesses not considered essential were 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 may be choppy going forward.”
Kleinhenz goes on to say, “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,” cautioning, “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.”
The U.S. Census Bureau said today that overall retail sales during April were down 16.4-percent seasonally adjusted from March and down 21.6-percent unadjusted year-over-year. That follows a record-setting 8.3-percent month-over-month drop in March.
Kleinhenz cautioned that the reliability of April’s numbers could be questionable because many retailers whose businesses were closed were not in their offices to respond to the Census Bureau’s monthly survey of sales data. In addition, the unprecedented economic situation makes it difficult to seasonally adjust the data for the fluctuations in sales that normally come in predictable cycles throughout the year.
National Retail Federation President and CEO Matthew Shay responded to the U.S. Census Bureau’s data as well, saying, “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 today’s report, we know it will be leading our nation’s economic recovery as this crisis recedes.”
NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants in order to focus on core retail – showed April was down 14.1-percent seasonally adjusted from March and down 8.7-percent unadjusted year-over-year. The NRF numbers show less of a decline than the Census Bureau because the categories excluded were among those most affected as fewer people were driving and most restaurants were limited to take-out orders if not closed entirely.
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. Online, grocery stores and building materials were the only categories that saw a year-over-year gain.
Specifics from key retail sectors during April include:
- Online and other non-store sales were up 21.2-percent unadjusted year-over-year and up 8.4-percent month-over-month seasonally adjusted.
- Grocery and beverage stores were up 13.3-percent unadjusted year-over-year but down 13.1-percent month-over-month seasonally adjusted.
- Building materials and garden supply stores were up 1.2-percent unadjusted year-over-year but down 3.5-percent month-over-month seasonally adjusted.
- Health and personal care stores were down 10.8-percent unadjusted year-over-year and down 15.2-percent month-over-month seasonally adjusted.
- General merchandise stores were down 13.8-percent unadjusted year-over-year and down 20.8-percent month-over-month seasonally adjusted.
- Sporting goods stores were down 48.7-percent unadjusted year-over-year and down 38-percent month-over-month seasonally adjusted.
- Electronics and appliance stores were down 64.8-percent unadjusted year-over-year and down 60.6-percent month-over-month seasonally adjusted.
- Furniture and home furnishings stores were down 66.3-percent unadjusted year-over-year and down 58.7-percent month-over-month seasonally adjusted.
- Clothing and clothing accessory stores were down 89.3-percent unadjusted year-over-year and down 78.8-percent month-over-month seasonally adjusted.
The National Retail Federation, the world’s largest retail trade association, advocates for the people, brands, policies and ideas that help retail thrive. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs — 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies.