by Chad Dixon, Senior Associate
Most Improved – Sales Change over Prior Month
Americans’ retail spending surpassed pre-pandemic levels in July as spending surged on electronics to help people stay entertained at home and appliances for home remodels. Sales have finally slowed on exercise gear and outdoor equipment such as kayaks and weights.
The U.S. is slowly recovering from the sharpest economic contraction in modern history. Consumers are still spending, despite numerous reimposed restrictions on public gatherings and store closures. Many economists attributed the increase in retail sales over the past three months to a $600 weekly unemployment benefits supplement from the government, which amounted to almost $75 billion in July. The supplement ended on July 31, leaving economists to expect a decline in retail sales in August.
“Similar to the jobs report, retail sales stand in stark contrast to the idea that growth in July ‘stalled’ – when in fact it continued at a robust, if somewhat slower, pace,” Citigroup economist Andrew Hollenhorst said in a note. Retail sales are considered a barometer for the U.S. economy, where two-thirds of its activity is driven by consumer spending. After accounting for seasonal factors, sales were 1.7% higher compared to February, the month before the pandemic shut down much of the economy. According to data analytics firm SafeGraph Inc, foot traffic in retail stores, which declined six weeks ago coinciding with the final distribution of stimulus checks, have since remained steady.
August retail sales will likely be heavily scrutinized. The $600 weekly unemployment benefit expired at the end of July; the President and Congress are at an impass over a new stimulus package that will likely not be resolved for a few weeks. The unemployment rate, despite dropping in July, remains historically high at 10.2%.
As consumer behaviors and retail spending patterns evolve, retail sales are likely to experience categorical surges. Watch for our analysis and predictions as we continue to track trends over the coming months.
Major Retailers Who Have Filed Bankruptcy During the Coronavirus Pandemic
- Stein Mart (August 12), off-price department store
- Tailored Brands (August 2), Suiting (Jos. A Bank & Men’s Wearhouse)
- Lord & Taylor (August 2), nation’s oldest department store
- California Pizza Kitchen (July 30), pizza-themed restaurant chain
- Ascena (July 23), Women’s and girls clothing brands
- Muji (July 11), Japanese retailer of household goods and apparel
- Sur La Table (July 8), French-inspired cookware retailer
- Brooks Brothers (July 8), classic suit brand
- Lucky Brand (July 3), Denim and apparel retailer
- Cirque du Soleil (June 29), acrobatics and entertainment group
- CEC Entertainment (June 24), parent company of Chuck E. Cheese
- GNC (June 23), Vitamin and supplement shop with 3,000 stores
- 24 Hour Fitness (June 14), Gym with 400 locations
- Le Pain Quotidien (May 27), French bakery chain
- Tuesday Morning (May 27), Discount off-price retailer
- JC Penney (May 16), Department store
- Stage Stores (May 10), Department store
- Neiman Marcus (May 7), Luxury department store
- J. Crew (May 4), Clothing brand
- Gold’s Gym (May 4), Gym with 700 locations
- Cinemax Cinemas (April 25), Movie theatre chain
- True Religion Apparel (April 13), Clothing brand
- FoodFirst, Bravo, and Brio (April 10), Restaurant chains
- Apex Parks (April 8), Entertainment and water parks
- Dean & Deluca (March 31), Gourmet foods retailer
Interested in learning more on the state of retail? Connect with our team.