Pandemic sent U.S. retail sales down a record 16.4% in April

'This is going to be very painful. For some, it’s going to be fatal.'

Posted: May 15, 2020 3:30 PM

BALTIMORE (AP) — 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, chief U.S. economist for the consultancy Maria Fiorini Ramirez.

Shapiro said he thinks retail sales should rebound somewhat as states and localities 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 long-standing 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 back-to-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 non-store retailers, evidence that the pandemic has accelerated the shift toward online shopping.

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, a 29-year-old from suburban 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 anytime soon to browse stores or simply shop for fun.

“I feel like, across the board, everyone’s habits have changed,” she said.

In the past two weeks, J.Crew, Neiman Marcus and Stage Stores have filed for bankruptcy protection. J.C. Penney appears on the verge of following them. UBS estimates that roughly 100,000 stores could shutter over the next five years.

“The whole economic model is unraveling,” Neil Saunders, managing director of GlobalData Retail. “This is going to be very painful. For some, it’s going to be fatal.”

An April analysis by a group of academic economists found that a one-month closure could wipe out 31% of non-grocer retailers. A four-month closure could force 65% to close.

The plunge in retail spending is a key reason why the U.S. economy is contracting. Retail sales account for roughly half of all consumer spending, which fuels about 70% of total economic activity. The rest of consumer spending includes services like cellphone and internet contracts, gym memberships and child care.

With few Americans shopping, traveling, eating out or otherwise spending normally, economists have estimated that the gross domestic product — the broadest gauge of economic activity — is shrinking in the April-June quarter at a roughly 40% annual rate. That would be the deepest quarterly drop on record.

The pressures being exerted on retail are also being felt globally. Among the European countries that share the euro currency, retail sales fell a painful 11.2% from February to March.

Spending tracked by Opportunity Insights suggests that consumer spending might have bottomed out around mid-April before beginning to tick up slightly, at least in the clothing and general merchandise categories. But spending on transportation, restaurants, hotels and arts and entertainment remains severely depressed.

Even with the sales declines, the pandemic is forcing shifts in what people buy as they adjust to working at home. CSolutions, which monitors sales of packaged goods, has noted a shift to comfort and convenience. Sales of baking flour, tomato sauces, ice cream, premixed cocktails and breakfast sausages have surged from a year ago.

Pajama-buying rocketed 143% from March to April, according to Adobe Analytics, which monitors online retailers. By contrast, sales of pants, jackets and bras have declined.

Cody Pipper, a sales associate for a 16-store chain called Litehouse Pools and Spas, says he's noticed that more people are now spending in ways that serve their at-home lifestyles. Pipper, 24, of Elyria, Ohio, said he himself spent $2,500 for a Peloton exercise bike for his wife, a medical assistant who recently returned to work. He said they expect to spend less on dining out and shopping at the mall.

“I’ve had a really good time with the family hanging out, watching TV," said Pipper who has a 1-year-old son. “I think this is the norm. This is what we are supposed to do now.”

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 62993

Reported Deaths: 1731
CountyConfirmedDeaths
Hennepin19873842
Ramsey7827270
Dakota4610106
Anoka3841115
Stearns292820
Washington222748
Olmsted179123
Nobles17777
Scott163422
Mower11112
Rice10468
Blue Earth9465
Wright9185
Carver8993
Clay79440
Sherburne75310
Kandiyohi7141
St. Louis62120
Todd4302
Lyon4263
Watonwan3671
Freeborn3611
Nicollet35613
Steele3562
Benton3253
Winona26616
Beltrami2640
Crow Wing25214
Le Sueur2301
McLeod2240
Martin2105
Chisago2091
Goodhue2059
Otter Tail2044
Cottonwood1780
Becker1621
Pipestone1589
Polk1564
Waseca1561
Carlton1470
Itasca14612
Douglas1442
Isanti1370
Unassigned13546
Dodge1310
Pine1290
Murray1251
Chippewa1171
Morrison941
Wabasha930
Brown922
Faribault920
Meeker872
Rock860
Sibley862
Koochiching833
Cass802
Jackson790
Pennington751
Mille Lacs733
Fillmore720
Renville675
Lincoln610
Grant563
Swift561
Roseau530
Yellow Medicine530
Pope480
Houston450
Aitkin411
Norman400
Kanabec372
Redwood370
Hubbard360
Wilkin353
Marshall290
Wadena280
Mahnomen271
Big Stone250
Red Lake240
Lake220
Stevens180
Clearwater140
Traverse130
Lac qui Parle80
Cook50
Lake of the Woods40
Kittson30

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 50230

Reported Deaths: 955
CountyConfirmedDeaths
Polk10612210
Woodbury377052
Black Hawk320066
Linn245689
Johnson213820
Dallas193235
Buena Vista180012
Scott176815
Dubuque173431
Marshall145627
Pottawattamie136729
Story118915
Wapello93435
Muscatine86048
Webster8498
Crawford7393
Cerro Gordo65617
Sioux6533
Warren5861
Tama55729
Jasper48427
Wright4821
Plymouth47912
Clinton4344
Dickinson3844
Louisa37814
Washington30510
Boone2723
Franklin25512
Hamilton2551
Bremer2337
Clarke2063
Clay2021
Carroll2012
Des Moines1992
Emmet1934
Shelby1881
Hardin1860
Marion1830
Floyd1673
Benton1621
Jackson1601
Poweshiek1608
Allamakee1584
Mahaska14217
Henry1404
Guthrie1385
Buchanan1351
Cedar1351
Jones1352
Butler1312
Lee1294
Madison1282
Hancock1242
Humboldt1241
Delaware1231
Lyon1232
Pocahontas1212
Harrison1131
Cherokee1101
Clayton1093
Winneshiek1021
Page1000
Taylor1000
Iowa981
Kossuth970
Mills941
Monona920
Winnebago920
Palo Alto910
Fayette900
Calhoun872
Cass871
Jefferson870
Sac860
Osceola850
Grundy831
Union811
Mitchell800
Monroe758
Lucas734
Worth680
Davis612
Montgomery614
Chickasaw600
Appanoose523
Howard510
Fremont450
Greene420
Keokuk401
Adair380
Van Buren381
Ida330
Audubon291
Decatur270
Ringgold231
Wayne211
Adams170
Unassigned20
Rochester
Clear
78° wxIcon
Hi: 84° Lo: 56°
Feels Like: 80°
Mason City
Broken Clouds
76° wxIcon
Hi: 85° Lo: 57°
Feels Like: 76°
Albert Lea
Scattered Clouds
79° wxIcon
Hi: 83° Lo: 56°
Feels Like: 81°
Austin
Broken Clouds
77° wxIcon
Hi: 84° Lo: 56°
Feels Like: 78°
Charles City
Clear
75° wxIcon
Hi: 84° Lo: 58°
Feels Like: 75°
Sever storm chances return for Friday night
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Fan challenges Rochester Honkers to a win

Image

Essential Worker Convoy

Image

Olmsted County Election Prep

Image

Move With The Mayor

Image

Princess Kay of The Milky Way Is Crowned

Image

Rochester Events Cancelled

Image

Sean's Weather 8/14

Image

Car thefts on the rise in Rochester

Image

Rochester Repertory Theatre Company hosting drive in theater

Image

NSIC suspends athletic competitions through the end of the year

Community Events