According to numbers released by the U.S. Census Bureau, the National Trade Federation (NRF), and Dow Jones, retail sales dropped nearly twice as much in April as they did in March. Differing methodology in calculations between the three organizations reflect a drop of 12.3% on the low end to 16.4% on the high end.
“These retail sales numbers are not a surprise given the current state of affairs,” says NRF President and CEO Matthew Shay. “The vast majority of retail stores have been closed, we are in the midst of historic unemployment and when it comes to personal finances, discretionary spending takes a back seat to essentials. Prior to this pandemic, retail was setting records in year-over-year growth, employment, and investment. It is a resilient industry serving a smart consumer, and despite today’s report, we know it will be leading our nation’s economic recovery as this crisis recedes.”
According to the U.S. Census Bureau, its -16.4% calculation nearly doubles the record-setting 8.3% month-over-month drop in March.
“As predicted, retail sales were bad in April and lower than in March,” says NRF Chief Economist Jack Kleinhenz. “Now that we’re in mid-May, many businesses are already starting to reopen. Relief payments and pent-up demand should provide some degree of post-shutdown rebound, but spending will be far from normal and may be choppy going forward.”
Kleinhenz also cautions the reliability of April’s numbers, noting that there could be questionable reporting since many retailers who were closed were not in their offices to respond to the Census Bureau’s monthly survey.
“I’m still of the opinion that we went into this with the economy on a sound footing and that we will hopefully come out of it the same,” Kleinhenz says. “But we’re going to need more data to tell us whether the underpinnings of the economy have been damaged and how badly. We need to carefully watch the data and learn to understand what it is telling us.”
According to NRF reporting, online and non-store sales grew 21.2%, grocery and beverage stores were up 13.3%, and building materials and garden stores were up 1.2% unadjusted year-over-year. Every other tracked category declined, led by a massive 89.3% drop for clothing and accessories.