Retail and food services saw their biggest monthly drop on record
Retail and food services sales in April plummeted 16.4%, their largest decline since the government began tracking data. Monthly sales in March were $483.5 billion compared to $403.9 billion in April, according to the Commerce Department.
The dismal figures almost doubled March’s massive drop of 8.3% as stay-at-home orders began to take effect, businesses across the country shut down, and millions were laid off from their jobs and lost income.
“I think obviously [the report] is a little bit discouraging but I also think it’s not that surprising to see how much retail — apparel specifically — suffered,” said Alexis DeSalva, a senior research analyst with Mintel.
The clothing and clothing accessories category experienced the biggest drop at almost 79%. Nearly every type of retail operation declined, even grocery stores, which decreased 13.2% last month.
Camilla Yanushevsky, an equity research analyst at CFRA Research, thinks this figure reflects how people had initially panicked about the coronavirus and began stockpiling food and household items in March, but now don’t have as much to buy. “They already overbought everything in March, and the psychology of the consumer switches from stockpiling to penny pinching,” she said.
Alexis DeSalva said the decline may also reflect more grocery purchases at places such as Amazon, Target and Walmart instead. People may be buying all their necessities at a store like Walmart so they can avoid making multiple trips.
The only category to see gains was “nonstore retailers,” like online businesses, which jumped 8.4%.
While the clothing stores category had the biggest decline, the category could get a boost as companies advertise sales and consumers shift into a “treat yourself” mentality.
“I think some of these promos that rival Black Friday or Cyber Monday are going to cause a spur of demand for apparel,” Yanushevsky said.
Yanushevsky added that sporting goods equipment and apparel may also see a boost as the summer season begins and more people want to get out of the house. But businesses that sell bigger ticket items, like cars, will probably take longer to recover.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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