Overall March was a mixed yet difficult month for retailers as our country sheltered at home to prevent the spreading COVID-19 virus. Overall retail sales dropped 8.75%, the largest monthly drop ever recorded, exceeding a 4.3% decline in November 2008 during the Great Recession.
“This is a market of haves and have nots,” said Jack Kleinhenz, Chief Economist for the National Retail Federation.
That’s because many essential businesses saw lines of shoppers extending out the doors to buy essentials. The federation reported that grocery sales jumped 25.7% unadjusted compared to the same time last year. Other gainers were health and personal care stores, up 5.5%, and online sales, up 12.1%, compared to the same time last year.
On the low end, as mandatory government safety orders closed so many stores, apparel sales dropped 52% while furniture sales dropped 25.2% compared to the same time last year.
While retailers were hiring last month, topped by Amazon expanding its payroll for online sales by 100,000, employees at closed stores either lost their jobs or accepted furloughs. It’s important to note that NRF excludes auto dealers, gasoline stations and restaurants that were among the hardest hit last month.
In response, President Trump has called together retail industry leaders, the Great American Economic Recovery panel, to advise him on how best to restart the economy and get Americans back to work. The panel includes representation from Washington Retail members Walmart, Home Depot, Lowe’s, Amazon, Target, Best Buy, Walgreens and NRF President and CEO Matthew Shay. The bipartisan group’s goal is to restore the health and wealth of a more resilient U.S. economy.
All signs point to a gradual transition depending upon factors including infection testing capability and how well we all do in stopping the spread of the virus.
“Even if the economy begins to reopen in May, consumer behavior may take a long time to adjust,” Kleinhenz said. “Don’t be surprised if the data going forward shows a worsening situation.”
The virus has shown us the importance of consumers on more than one front. We all must work to remain healthy to stop the spread of the virus and speed economic recovery.
Once that starts to happen, our confidence as consumers will ultimately determine how quickly the economy recovers.