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Inti Pacheco explains the major rebound in the retail industry that has occurred since many states were allowed to reopen. He writes at The Wall Street Journal (abridged):
The coronavirus pandemic accelerated a major shift in the retail industry.
Traffic to stores evaporated. Online credit-card transactions soared. E-commerce sales in the second quarter rose by 44.5% compared with the same period in 2019 and they now make up 16% of all U.S. retail sales, according to the Commerce Department.
Consumer spending has picked up since many cities and states began lifting lockdown restrictions and allowing stores to reopen in May, but only some sectors have regained lost ground.
Sales, profits and hiring at many grocers and home-improvement retailers are up. Many apparel sellers have slashed staff and closed stores for good. Weekly foot traffic from July until the second week of September is down by an average of 14% compared with the same period a year ago, according to mobile-device location data from foot-traffic analytics firm Placer.ai.
The pandemic pushed many of the last online-shopping holdouts over the e-commerce hump. Online transactions with credit and debit cards have increased an average of 88% each month since the beginning of April, according to weekly transactions collected by financial-data firm Facteus.
Big retailers such as J.C. Penney Co. , Neiman Marcus Group Inc., GNC Holdings Inc. and Brooks Brothers Inc. filed for bankruptcy protection, and each of them closed hundreds of stores. Since April some 5,000 stores in the U.S. have shut their doors for good. In the same period only about 680 new stores were opened, according to Coresight Research. In August alone, almost 2,200 retail stores closed while only 14 opened.
U.S. retail sales have been climbing steadily since late May,
Sporting-goods stores recovered faster than most and surpassed their 2019 sales numbers, but growth moderated in July and August. Clothing stores haven’t recovered, with sales declining by an average of 44% a month since March.
By Inti Pacheco
