The Commerce Department releases its headline retail sales report on Wednesday. Economists expect the data from March to show significant drops across most categories as much of the country faced stay-at-home orders midmonth due to the ongoing COVID-19 crisis.
With the virus economy rattling nonessential businesses and online grocery orders taking off, here are five things to watch in the report.
- CLOSED STORES. CLOSED WALLETS.
Consumers are not going on shopping sprees.
Sales at brick and mortar clothing stores were already on life support before the coronavirus pandemic forced shops to abruptly close.
The report will reflect two weeks of average consumer behavior at apparel shops, which began slowing earlier in the year. The data will also show just how much money companies lost in the latter half of the month after almost every state enacted some form of shelter-in-place order.
“Few stores that sell clothes qualified as essential services and most people’s focus was on something other than clothing anyway,” said Michael Englund, chief economist at Action Economics.
April’s numbers will reveal a more complete picture of how consumers are spending during the sudden economic downturn. Bloomberg surveyed economists industrywide and the consensus is that overall retail sales figures slumped 8% last month.
2. E-COMMERCE BOON
Consumers turned their attention online to avoid crowded supermarkets around the time the coronavirus was designated a pandemic.
Just how quickly America’s shoppers shifted behavior will be evident in Wednesday’s numbers.
The onslaught of online sales could mask several logistics-related bottlenecks as e-commerce brands grappled with demand shock. Amazon scaled back on its same-day deliveries while Instacart and Walmart warned customers about limited delivery availability.
Watch to see if these limitations impacted so-called non-store sales.
3. THE HOARDING EFFECT
A sizable portion of the nation’s inventory was removed from shelves and stored in apartments and homes in March due to uncertainty and hysteria surrounding the respiratory illness.
Big box stores like Target and Walmart were hit by a wave of shoppers as consumers planned to hunker down. Whether it was toilet paper, canned goods or sanitizing products, these transactions could partly offset overall retail sales results.
The outcome of this shopping phenomenon will become more evident when the food and beverage category numbers are unveiled.
4. GOING NOWHERE FAST
Car dealership sales and purchases at auto parts stores came to a screeching halt last month, as many automotive sellers weren’t categorized as essential businesses.
Car sales had to contend with stock market turmoil that ravaged people’s savings, potentially impacting consumers’ willingness to take on big-ticket purchases like a new set of wheels.
Household brands such as Ford, General Motors and Toyota reported steep March or first-quarter declines citing fallout from the coronavirus crisis. Gasoline prices were low, and with curfews rolling out and layoffs rising, the data will indicate just how much money Americans spent on household transportation.
Total auto sales dipped slightly in February after showing modest gains at the top of the year.
5. BARS CLOSED. BOOZE BOOM.
One metric that will show how Americans are spending their newfound time at home: Beer, wine and liquor store sales.
Alcohol delivery startups like Drizly reported skyrocketing sales in March, while some states have allowed bars and restaurants to offer curbside pickup of alcohol. In states such as New York, Maryland and New Jersey, liquor retailers are fully operational.
Alcohol purchases at liquor and grocery stores rose 22% year-over-year at the end of March, according to Nielsen research.