The U.S. Census Bureau recently released their July 2020 Advance Monthly Sales for Retail and Food Services report. Adjusted for seasonal variation, July sales totaled $536.0 billion, which represents a 1.2 percent increase over June’s numbers ($529.4 billion). This marks the third consecutive month with increases in U.S. consumer spending.
Some cause for optimism
July’s retail and food services sales figures were also 2.7 percent higher than July 2019, however, total sales for May through July of this year were still down 0.2 percent from the same period in 2019. But July numbers were 1.7 percent higher than February’s — notable since that was the month before many parts of the economy were forced to shut down.
Some other encouraging figures revealed by the July data include:
- July retail trade sales were at $483.5 billion, up 0.8 percent from June of this year and up 5.8 percent from July 2019 ($456.997 billion).
- Non-store retailers — i.e., online sales — were up 24.7 percent from July 2019, jumping from $67.38 billion last July to $84.04 billion last month.
- Food and beverage store sales continue to do well, bringing in $71.75 billion in July. That’s up 11.1 percent from the same time last year when sales were $64.57 billion.
Other industries are still languishing amid the economic woes brought about by the pandemic, such as:
Clothing and accessories stores
Clothing and accessories stores are still struggling under the weight of the down economy. Retail sales in this vertical rose 5.7 percent to $17.73 billion in July 2020 after surging 105.1 percent in June 2020. Yet sales in July 2020 were still 20.9 percent lower than year-ago ($22.41 billion), and year to date, sales remain down 36.5 percent.
Clothing and accessories stores also gained 120,800 jobs in July 2020, a 15.0 percent increase versus June 2020. But again, employment during July 2020 remained 28.7 percent below year-ago.
We are beginning to see bankruptcies by several major clothing retailers as well. Ascena Retail, owner of Ann Taylor and Lane Bryant, filed for bankruptcy in mid-July. The company will close 1,600 of its approximately 2,800 stores and hopes to shed $1 billion of its $1.1 billion in debt, according to the New York Times.
Brooks Brothers, New York & Co., and Lucky Brand have also filed for bankruptcy in response to the COVID-19 pandemic. These chains followed J. Crew, Neiman Marcus, Stage Stores, and J.C. Penney in filing Chapter 11. UBS analysts said that "retail store closures are likely to accelerate in a post-COVID-19 world."
Food services and drinking places
Restaurants and bars have been heavily impacted by both quarantine shutdowns as well as Americans who are tightening their belts in order to save money. While July saw a 5 percent uptick in sales ($52.47 billion) versus June ($49.95 billion), the industry is still reeling. Sales are down 18.0 percent from July 2019 when the industry saw $64.71 billion in sales.
In July 2020, the restaurant and bar industry also gained 502,000 jobs, a 5.5 percent increase over June 2020, but jobs in this hard-hit industry are still down 19.7 percent versus year-ago.
Numerous states have paused or rolled back reopenings due to rising COVID-19 infection rates. Public health officials suspect that crowded restaurants and bars could be contributing to the virus’ spread. These stops and starts are especially difficult for restaurants because food supplies and ingredients can be perishable.
Many restaurant owners also spent thousands of dollars to equip dining rooms and staff for a new normal and were just starting to recover some sales lost during the spring, according to the New York Times. The U.S. restaurant industry expects losses totaling $240 billion through the end of 2020, according to the National Restaurant Association (NRA), assuming a gradual reopening of the economy this summer.
As a result of these myriad challenges, many restaurants are throwing in the towel. Yelp found that 53 percent of the restaurants noted as “closed” on its site marked their closure as permanent.
Gas stations and convenience stores
Sales at gas stations and convenience stores saw a 6.2 percent uptick last month, with sales rising from $33.52 billion in June to $35.59 billion in July. But that’s still down 15.6 percent from the $42.16 billion in gas station sales in July of 2019. The industry also gained 5,800 jobs in July 2020, a 0.6 percent increase over June 2020 but a 3.9 percent decrease versus July 2019.
Gas prices averaged $2.178 on August 14, down from $2.198 last month and down from $2.642 last year, according to AAA. While prices are expected to fluctuate as states reopen and drivers take to the roads, reduced demand for fuel is expected to keep gas prices low.
Customer visits to convenience stores continue to adjust to the new normal of COVID-19. Total trips during the two-week period ending July 26 were 88 percent of year-ago levels, down from 90 percent two weeks earlier during the 11 a.m. to 3 p.m. time period. Trips during the morning rush (7 a.m. to 9:59 a.m.) were at 85 percent of year-ago levels, indicating that Americans have not yet fully resumed pre-pandemic routines, according to the National Association of Convenience Stores (NACS) and PDI.
The slow return to normal
So, while overall retail and food sales rose in July versus June of this year, the question is: Will it be enough to stop the bleeding, particularly without new stimulus dollars from Congress? As long as states struggle to contain their COVD-19 infection rates and consumers remain cautious about spending money, it seems likely that the economy will continue to falter, with certain industries paying an especially high price.
You can learn more about how these and other industries have been impacted by COVID-19 by visiting our free COVID-19 webpage.
Photo credit: Artem Beliaikin via pexels