U.S. retail sales plummeted 8.7% in March, an unprecedented decline, as the viral outbreak forced an almost complete lockdown of commerce nationwide.
The deterioration of sales far outpaced the previous record decline of 3.9% that took place during the depths of the Great Recession in November 2008.
Auto sales dropped 25.6%, while clothing store sales collapsed, sliding 50.5%, the Commerce Department said Wednesday. Restaurants and bars reported a nearly 27% fall in revenue.
“This is crushing our economy, and that’s not being dramatic,” said Cailey Locklair, president of the Maryland Retailers Association.
Retailers are asking state and local governments to start establishing policies preparing for small businesses to reopen. So far those efforts are “hitting quite a few brick walls,” Locklair said. “We’ve been begging for some level of clarity, and we’re not getting it,” she said.
Retailers are members of their communities, Locklair said, and they don’t want to put anyone in danger. But eventually something has to give.
“We want to be responsible, but at the same time what’s the point if there isn’t anything left?” she said.
U.S. consumer confidence has plunged and the vast majority of Americans are hunkered down at home under shelter-in-place orders.
Consumer spending drives two-thirds of the U.S. economy, and the record drop in retail sales is a symptom of the sharp recession that most economists believe the U.S. has already entered. Economists at JPMorgan Chase now forecast the U.S. economy will shrink by a record-shattering 40% in the April-June quarter.
Signifying the titanic shift in consumer behavior, grocery store sales jumped by nearly 26% as Americans stocked up on food and consumer goods to ride out the pandemic. And a category that mostly includes online shopping rose 3.1%.
Spending may be falling at an even faster pace than the retail sales figures suggest. Wednesday’s report doesn’t include spending on services such as hotel stays, airline tickets, or movie theaters, all of them suffering some of the most severe financial duress during the outbreak.
With a nationwide shutdown of malls and most stores, the pandemic is putting many clothing retailers in peril, while increasing the dominance of big-box stores that have remained open during the pandemic because they sell essentials like food and household goods.
More than 250,000 stores, including Macy’s, Nordstrom and Nike, which sell non-essential merchandise have been shuttered since mid-March. That’s 60% of overall U.S. retail square footage, according to Neil Saunders, managing director of GlobalRetail Research
Major retailers including J.C. Penney, Macy’s and Nordstrom have furloughed hundreds of thousands of workers, while Walmart and Amazon are on hiring sprees to try to meet the surging demand of shoppers buying online or for curbside drop-off or delivery.
Locklair said the Maryland association’s members who are allowed to be open also are frustrated at the complexity of navigating the executive orders coming from state and localities.
One example is local orders dictating businesses provide workers face masks at a time, Locklair noted, when it’s difficult to obtain masks.
“We’ve been begging for some level of clarity and we’re not getting it,” she said.
Daily Record business reporter Adam Bednar and The Associated Press contributed to this story.