Sales Grow for the 1st Time Since COVID-19
The U.S. Census Bureau reports overall retail sales during June were up 7.5% seasonally adjusted from May and up 1.1% year-over-year. This is the first month of year-over-year gains since February. The National Retail Federation (NRF) attributes this increase to businesses closed by the coronavirus reopening, but it is hesitant to be optimistic amid continued outbreaks.
“June’s numbers show that retail spending is fueling the economic recovery,” NRF Chief Economist Jack Kleinhenz said. “How durable the improvement in retail spending will be is directly related to how widespread the resurgence in COVID-19 cases becomes. All eyes are on the infections that are accelerating in many parts of the country and they pose a serious threat to recovery.”
Grocery and beverage sales, in particular, were actually down 1.2% month-over-month, the first decline since the pandemic, as food spending continues to get back to a new normal. This category, however, was still up 11.4% unadjusted year-over-year.
Key retail sectors seeing the greatest month-over-month gains in June were:
- Clothing and clothing accessory stores: 105.1%, although still down 24.3% unadjusted year-over-year
- Electronics and appliance stores: 27.4%, down 11.7% unadjusted year-over-year
- Furniture and home furnishings stores: 32.5%, down 1.9% year-over-year
- Sporting goods stores: 26.5%, and up 22.4% unadjusted year-over-year
“The retail sales numbers from last month were very encouraging and reflect continued progress in the right direction,” NRF President and CEO Matthew Shay said. “It’s clear that congressional relief packages have found their way into consumers’ pockets and are being spent by people who are happy to be back out in communities that are slowly reopening. However, recent spikes in infection rates across the country have us focused on keeping associates and their customers safe, which is the only way we can keep the economy open as we move forward.”
Yesterday, NRF called on all retailers to adopt a nationwide policy requiring shoppers to wear masks right after Walmart and Sam's Club made an announcement of its policy going into effect Monday and right before Kroger said it's implementing a similar rule.
“Recoveries do not proceed in a straight line and no two are alike,” Kleinhenz said. “The current economy is far from normal and will require a lengthy period to absorb job losses and build up to where it was before. Government aid for consumers and businesses has helped but additional relief is warranted to sustain the consumer spending that is the backbone of our economy.”