stores reeling
Sales plunge a record 16% in April
BALTIMORE — U.S. retail sales tumbled by a record 16.4% from March to April as business shutdowns caused by the coronavirus kept shoppers away, threatened the viability of stores across the country and further weighed down a sinking economy.
The Commerce Department’s report Friday on retail purchases showed a sector that has collapsed so fast that sales over the past 12 months are down a crippling 21.6%. The severity of the decline is unrivaled for retail figures that date back to 1992. The monthly decline in April nearly doubled the previous record drop of 8.3% — set just one month earlier.
“It’s like a hurricane came and leveled the entire economy, and now we’re trying to get it back up and running,” said Joshua Shapiro, an economist for the Maria Fiorini Ramirez consulting firm.
Shapiro said he thinks retail sales should rebound somewhat as states reopen their economies. But he said overall sales would remain depressed “because there is going to be a big chunk of the lost jobs that don’t come back.”
The sharpest declines from March to April were at clothing, electronics and furniture stores. A longstanding migration of consumers toward online purchases is accelerating, with that segment posting a 8.4% monthly gain. Measured year over year, online sales surged 21.6%.
Other than online, not a single retail category was spared in April. Auto dealers suffered a monthly drop of 13%. Furniture stores absorbed a 59% plunge. Electronics and appliance stores were down over 60%. Retailers that sell building materials posted a drop of roughly 3%. After panic buying in March, grocery sales fell 13%.
Clothing-store sales tumbled 79%, department stores 29%. Restaurants, some of which are already starting to close permanently, endured a nearly 30% decline despite shifting aggressively to takeout and delivery orders.
For a retail sector that had already been reeling, a backto-back free-fall in spending poses a grave risk. Department
stores, restaurants and auto dealerships are in danger. Nearly $1 of every $5 spent at retailers last month went to nonstore retailers, evidence that the pandemic has accelerated the shift toward online shopping.
Retailers are being imperiled not only by mandated business shutdowns but also by a record loss of 36 million jobs over the past two months. The layoffs and reduced hours have encouraged a pullback in spending.
J.Crew, Neiman Marcus, Stage Stores and J.C. Penney have filed for bankruptcy protection.
“The whole economic model is unraveling,” Neil Saunders of GlobalData Retail. “This is going to be very painful. For some, it’s going to be fatal.”