March retail sales in the United States plunged as non-essential businesses remained closed in an effort to curb coronavirus from spreading.
A report from the Commerce of Department on Wednesday, April 15, said that the U.S. retail sales had dropped to a record 8.7% in March, as consumer spending is restricted to essential items.
Clothing and accessories stores led US retail sales record slump
The mandatory closure of non-essential businesses due to the coronavirus crisis sent the retail sales in March into its most significant decline in decades. The sales slump records an 8.7% loss and is the lowest compared to the 2008 recession, which falls a record 3.8% in November.
The clothing and accessories industries led the sales decline after it dropped 50.5% last month. It was followed by restaurants and furniture stores, with sales down by 26.5% to 27%.
Aside from that, motor vehicle stores profit slipped 25.6%, while leisure, sporting goods, and bookstores fell 23.3%. Miscellaneous retailers, including gas stations, also suffered from a double-digit loss in March.
Grocers, e-commerce, and wellness stores sales rose
Other retail sectors, on the one hand, saw a leap in demand amid the pandemic. Grocery stores lead the surge with profit gains jumped by 27% as consumer spending shifted to food and beverages.
It was followed by e-commerce shops with a 3.1% increase in sales, with Amazon and Walmart receiving the largest increase. Health and wellness stores sales leaped 4.3%, while home centers like Home Depot posted a 1.3% profit gain last Month.
Amazon and Walmart reportedly said they are looking to hire additional workers as well, as demand continues to increase. Strict physical distancing rules forced businesses to shut down, placing almost 17 million Americans unemployed.
More to come for US retail sectors
Brick-and-mortar retailers that are struggling now due to the global health crisis and haven’t shifted or integrated digital shops are more likely to file bankruptcy eventually. Economists have even suggested that the country has entered a recession since March.
According to Michael Pearce, senior U.S. economist of Capital Economics, the worse is yet to come, particularly in the second quarter of the year. He said:
“With Clear signs of panic buying of necessities and the fact that lockdowns were introduced only around the middle of the month means that far worse is to come in April and the second quarter, more generally.”
Business economics professor Sung Won Sohn shared that the economy is “nearly in a freefall.”
She also suggested that the U.S. will have to wait for coronavirus infections to stabilize before everyone can see how deep the impact of the pandemic is. She added that it is “going to be pretty deep.”
Featured image courtesy of GongHuimin/Pixabay