Nationwide retail sales drop record 16.4%
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 decline is unrivaled for retail figures since 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, chief U.S. economist for the consultancy Maria Fiorini Ramirez.
Shapiro said retail sales should rebound somewhat as states and localities reopen economies. But he said sales will 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 an 8.4% monthly gain. Measured year over year, online sales surged 21.6%.
Other than online, no 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 closing permanently, endured a nearly 30% decline despite shifting to takeout and delivery orders.
For a retail sector that were already reeling, a back-to-back free fall in spending poses a risk. Department stores, restaurants and auto dealerships are in danger.
Retailers are being imperiled not only by business shutdowns mandated by states and localities 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.
Lindsay Fulton, 29, from Richmond, Virginia, who was furloughed from her sales job at the end of March, said most of what little shopping she does now is online. She has no plans to browse stores or simply shop for fun.
“I feel like, across the board, everyone’s habits have changed,” she said.