America’s retail sales collapsed to a historic low last month, underscoring just how badly retailers are struggling during the coronavirus crisis.
An advance reading from the Census Bureau showed US retail sales plummeted by 16.4% in April, the largest since this data series began in 1992. It’s also significantly higher than the revised 8.3% sales drop in March.
As people continue to stay at home across much of the country, they’re spending more on food than before but little on other things. And with mass layoffs leaving millions of Americans out of work, discretionary spending has been crunched.
Excluding autos, the overall drop in retail sales was even steeper at 17.2%. Many Americans are putting big purchases like cars on the back burner.
Particularly weak were sales at clothing and accessories stores, which were down a whopping 89.3% in April.
Retailers have been forced to shutter hundreds of thousands of stores during the crisis. Several have filed for bankruptcy in recent weeks, including Neiman Marcus and J.Crew. JCPenney is expected to file for bankruptcy in the coming days.
Some chains, however, have bucked the trend. Walmart, Target, Kroger and others are growing sales, as they benefit from Americans buying more groceries and home essentials as they are sheltering in place. Online shopping for essentials continues to boost Amazon.
In the long-term, analysts expect the crisis to further widen the gap between the industry’s winners and losers.