Retail Sales Continue to Climb in June

By Chad Dixon, Senior Associate

As predicted, June’s retail sales data is the strongest since the stay-at-home orders began. Sales in June grew 7.5% over the prior month, or 7.3% excluding auto sales, and we are now approaching pre-pandemic level of sales. After accounting for inflation, real sales growth (excluding auto sales) in June were down only 1.1% over the same month last year. This data indicates a “V” shaped economic recovery, however the recent retail closures in some states will pump the brakes on a quick rebound.

Interestingly, e-commerce sales are down 2.4% over prior month, indicating a shift in consumer attitudes and buying patterns. Consumers are looking to spend discretionary capital at physical retail locations.

Clothing stores continue to struggle to bounce-back. Although the sales have grown substantially since the stay-at-home orders started, they are still down 23% over the prior year. The same can be said for both electronics and furniture stores, down 13% and 4% over prior year, respectively.

Restaurant revenue rose for the second consecutive month in June as local economies eased restrictions. June represented the highest monthly sales volume since the beginning of the pandemic but are still down 28% from pre-pandemic.

Grocery stores and building materials represent the gains during the pandemic. Since June 2019, grocery store sales are up 12% and building material stores are up over 17%.

Potential Downsizing Many traditional retailers are planning on reducing their footprint, while some envision a “showroom” style store. Examples include:

  • JCPenney plans to layoff a thousand corporate employees as it reduces its footprint
  • Wells Fargo, the bank with the most retail locations, is planning to close hundreds of locations
  • Gold’s Gym is restructuring to focus on smaller urban locations
  • Pier 1 is expected to be sold to an e-commerce venture with direct-to-consumer only sales
  • Bed Bath and Beyond is closing 200 of its 1,500 stores, as sales are down 49%

Major Retailers Who Have Filed Bankruptcy During the Coronavirus Pandemic

  • 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 teams.

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