By Alan Wolf, YSN
Retail revenue returned with a vengeance last month, as cooped-up consumers around the country began revisiting newly reopened stores, stimulus checks in hand.
Total retail sales soared a record 17.7 percent in May over April, according to a monthly merchant tally tabulated by the U.S. Census Bureau. But it was the locked-down specialty sectors like furniture and consumer tech that really rocketed last month, going from zero to 60 seemingly the moment government restrictions were lifted.
Unshackled and reopening their doors to pent-up consumer demand, furniture and home furnishings shops racked up a stunning 90 percent sales increase month over month, bringing in an estimated $7.7 billion in revenue.
Results were none too shabby for the consumer electronics and home appliance channel either, which the Census Bureau combines into a single category. With some retailers in both industries struggling to attain “essential” status in March and April, business came roaring back in May with a sales gain of 50.5 percent as $5.7 billion changed hands.
“The economy kicked off in May as retailers and other businesses reopened and both stimulus money and supplemental unemployment checks fueled spending driven by pent-up demand from two months of shutdowns,” observed Jack Kleinhenz, Chief Economist of the National Retail Federation (NRF).
Speaking on CNBC’s “Squawk Box” business news show, NRF President and CEO Matthew Shay added that “For a sick economy, there is no better medicine than retailers responding to consumers who are ready to safely return to stores. These sales numbers do not reflect the same strength we had going into the pandemic, but they certainly reflect the trajectory we need coming out of it.”
Indeed, gauged by year-over-year performance, last month’s results were wan, with total retail sales off 6.1 percent from May 2019 and furniture and electronics/appliance stores down by double digits.
“Full recovery is still a long way off,” acknowledged Kleinhenz. “Comparisons against April have to be taken in context because April was a full month when almost everything that wasn’t deemed ‘essential’ was shut down. Spending has improved considerably but it’s still far below where it was a year ago, and while the freefall in consumer confidence is over, unemployment remains high and confidence is still at recession levels.”
While consumers’ wallets appear primed, Kleinhenz foresees an economic roller coaster for the immediate future — and one that could plummet again should the pandemic reignite.
But even then, argued Shay, “The most important thing now is to keep these retail stores open for business and not penalize them by closing their doors in the event of a coronavirus surge. As those stores that remained open – our economic first responders – have shown, retailers have developed solutions that protect the safety of their customers and associates, and they are sharing those lessons to the benefit of store owners large and small in communities across the country.”