Americans aren’t buying much beyond food right now, and that’s devastating huge swaths of the retail industry.
US retail sales slumped 8.7% in March, their worst monthly decline on record in the data available from the Census Bureau, which dates back to 1992.
Excluding autos and gas, retail sales fell by 3.1%.
While retail trade fell overall, one category stood out: grocery store sales surged 26.7% in March. And sales at non-store retailers, a category that would include e-commerce sites like Amazon (AMZN), increased 3.1%.
But sales at clothing and accessories stores, meanwhile, plunged 50.5% in March. Sales at furniture and home furnishing stores declined 26.8%, sales at sporting goods stores fell 23.3% and electronics and appliance sales declined 15.1%.
Except for grocery stores and other “essential” retailers, companies have shuttered stores and furloughed or laid off workers. Consumers have also pulled back their spending on discretionary items. That combination led to the steep drop in retail sales.
“Stricter lockdown measures, unprecedented layoffs and plummeting confidence have compounded into an extraordinary and multifaceted shock to consumer spending,” economists at Oxford Economics said in a research report Wednesday.
The coronavirus crisis will widen the gap between big box chains like Walmart (WMT)and Costco (COST), which are benefiting from panic shopping for groceries, and struggling clothing chains, experts predict.
“Traditional department stores, apparel retailers, and mom and pop shops of all types are struggling to survive, and bankruptcies will spike despite the federal assistance programs,” said Kerstin Braun, president of Stenn Group, an international trade finance organization. “Many retailers, including Nordstrom (JWN), J. Crew, and JCPenney (JCP), were already under stress before the pandemic and many storefronts will simply not reopen.”