The impact of coronavirus closures and travel bans pushed U.S. retail sales into their biggest monthly drop on the historical record during March as restaurants, bars, and many stores have now temporarily closed, and stay-at-home orders have decimated gasoline sales, the National Retail Federation (NRF) said today.
Even worse, an economic recovery could be a long ways off, the group said. “March was a month that started out with many stores still open, but far more are closed now,” NRF Chief Economist Jack Kleinhenz said in a release.“Don’t be surprised if the data going forward shows a worsening situation. Even if the economy begins to reopen in May, consumer behavior may take a long time to adjust. The road to recovery could be long and slow.”
The precipitous drop in sales was offset by spikes of demand in certain sectors as consumers flocked to “essential” retailers such as grocery stores, the NRF said. The rush to stockpile food and other items offset some of the decline, but was far too small to stop the overall trend.
“Covid-19 has hit the retail industry unevenly,” Kleinhenz said. “This is a market of haves and have-nots. The haves are the stores that remain open with lines out the doors to buy daily necessities while the have-nots are the stores that have closed and are taking the brunt of the impact of the pandemic. These numbers should come as no surprise given the mandated shutdown of our economy to slow the spread of the virus.”
By the numbers, the U.S. Census Bureau said today that overall retail sales during March were down 8.7% seasonally adjusted from February and down 6.2% unadjusted year-over-year. The monthly drop is the largest ever recorded, exceeding a 4.3% decline in November 2008 during the Great Recession.
Broken out by sectors, the deepest wounds were felt by clothing stores—with sales down 50.5% from February—as well as furniture stores (down 26.8%) and sporting goods stores (down 23.3%). Escaping the massacre were grocery store sales (up 25.6% from February), general merchandise stores – which include warehouse clubs that sell both food and essential household products (up 6.4%), and health and personal care stores—which include pharmacies (up 4.3%).
The numbers were similar when figures were compared to sales in March of 2018, one year ago. Clothing and clothing accessory stores were down 52% year-over-year, followed by furniture and home furnishings (down 25.2%), sporting goods (down 24.4%), and electronics and appliance (down 16.2%). The biggest gains were seen in grocery and beverage stores (up 25.7% year-over-year), general merchandise (up 5.7%), health and personal care (up 5.5%), online and other non-store sales (up 12. 1%), and building materials and garden supply (up 10.1%).