Grocery Sales a Bright Spot in Dim April for Retail
U.S. grocery sales increased 14.5% in April when compared with the same month in 2019, according to unadjusted retail figures released May 15 by the U.S. Census Bureau.
Food retail, for obvious reasons, has served as a relative bright spot during the pandemic and its resulting store closures, job losses and stay-at-home mandates. Indeed, recent first-quarter financial reports from food retailers show significant gains for both physical and online sales, along with larger costs because of hiring sprees, COVID-19 protection efforts and other measures.
But the larger world of U.S. retail is suffering through a funk that could last into the holiday shopping season and beyond. The latest Advanced Retail Trade Survey, from the Census Bureau, offers fresh data that describes the situation and puts into sharper focus the deeper retail challenges certain to come.
According to those new figures, overall retail and food service sales declined about 22% year over year in April. Excluding gas, vehicles and automotive parts, the retail sales decline was 17.3%, the Census Bureau noted.
Certain retail products are taking a bigger hit as the pandemic continues and some economies try to reopen and win back consumers who, according to other research, seem reluctant to venture out into the wider world of commerce until the outbreak eases. Had April been a normal month, many of those shoppers would have been buying last-minute Easter clothes, or perhaps even starting to buy their summer fashion warrdrobe. This April, however, sales of clothing and accessories dropped by 88%. Other recently released research, a client note from Wells Fargo, anticipates a significant, even permanent fall-off of U.S. apparel sales as a result of the pandemic, a problem that the upcoming holiday shopping season might not be able to fully fix, at least according to some observers.
Meanwhile, electronic and appliance retailers, along with furniture and home furnishings sellers, also had few reasons for immediate optimism in the new Census Bureau figures. Sales in those retail categories declined by 65% and 66%, respectively.
The National Retail Federation (NRF) offered an explanation for the general retail sales declines that might seem obvious, but which manages to paint a picture of the commerce difficulties that show little sign of easing, at least not in the short term.
“These retail sales numbers are not a surprise, given the current state of affairs. 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,” said Matthew Shay, president and CEO of the Washington, D.C.-based NRF.
Even so, Shay continued, there's reason for at least cautious optimism: “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.”
Even with those broader declines in retail sales in April, some food retailers, deemed essential and outside the scope of pandemic lockdowns over the past couple of months, have indeed enjoyed increased sales for the first quarter of 2020, according the financial reports already released. Phoenix-based Sprouts Farmers Market, for instance, recently reported a 16% year-over-year gain in net sales for its first quarter of 2020, along with a 10.6% boost in comparable-stores sales. Much of that growth comes from increased consumer demand during the COVID-19 pandemic, said the food retailer, No. 45 on on The PG 100, Progressive Grocer’s 2020 list of the top food retailers in the United States.