With many retailers closed amid the COVID-19 pandemic, it’s been expected that sales would see a dramatic decline. What’s been hard to estimate is just how big the drop will be, but now we have our first taste of real data.
According to the National Retail Federation and the U.S. Census Bureau, overall retail sales in March logged their biggest monthly drop on record as stay-at-home orders and closures of all but “essential” businesses have been enacted in most states. The initial result is a scattershot mix of highs and lows across categories. The Census Bureau says that retail sales slid 8.7%, seasonally adjusted from February and down 6.2% percent unadjusted year-over-year. The monthly drop is the largest ever recorded. In comparison, the previous record for an overall drop was the 4.3% decline in November 2008 during the Great Recession.
“COVID-19 has hit the retail industry unevenly,” says NRF Chief Economist Jack Kleinhenz. “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.”
While in agreement that the drop was massive, there is a discrepancy in the numbers between the U.S. Census Bureau and the NRF due to category exclusions in NRF data. The Census takes into account car dealers, gas stations, and restaurants that are not considered to be “core retail” by the NRF, which showed a 1.7% increase when seasonally adjusted from February, and 4.5% unadjusted year-over-year.
“March was a month that started out with many stores still open, but far more are closed now,” Kleinhenz adds. “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.”
Both the NRF and Census Bureau show massive, double-digit declines in categories such as apparel (-50.5%), furniture (-26.8), and sporting goods (-23.3%).
Unsurprisingly, stores that remained open saw big increases. Grocery stores were up 25.6%, and general merchandise stores — including warehouse clubs that sell food and household products were up 4.3%. Online sales spiked 3.1% and pharmacy sales grew 4.3%.
Neither NRF nor the Census Bureau directly reported sales numbers for toys and games.