The numbers are in for last month’s retail sales and they aren’t pretty.
Despite an increase in online purchases, total sales fell 16.4 percent in April — the largest monthly drop ever recorded, the New York Times reported, citing the latest report from the U.S. Department of Commerce. The amount of money spent was the lowest it’d been since 2012, even without accounting for inflation.
April’s figures were nearly twice the 8.3 percent drop in March, which had also set a record for U.S. retailers.
As expected, brick-and-mortar businesses saw the most significant declines in activity. Restaurants and bars lost half their business, while furniture stores sales fell by 66 percent. Clothing stores fared the worst of all with an 89 percent drop in sales.
Many industry experts and business owners predicted that April would be the worst month of the coronavirus pandemic for businesses, as state governments across the country mandated that non-essential businesses stay closed.
Now, some parts of the country are starting to re-open, which could buoy sales in May. But a recovery isn’t expected to be quick. With layoffs across industries, it’s uncertain how much disposable income consumers will have — or if they will feel safe shopping in public.
Some businesses could limp along for years before succumbing to the wounds inflicted by the pandemic and government mitigation measures. UBS estimates that 100,000 stores will close over the next five years.
A third of business owners surveyed by the Census Bureau this week said they expected it would take more than six months to recover, and 6.6 percent said they didn’t expect a full recovery at all. [NYT] — Dennis Lynch