Coronavirus Live Updates : NPR


People walk near closed shops on a quiet Las Vegas Strip amid the coronavirus pandemic on May 8.

Bridget Bennett/AFP/Getty Images


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Bridget Bennett/AFP/Getty Images

People walk near closed shops on a quiet Las Vegas Strip amid the coronavirus pandemic on May 8.

Bridget Bennett/AFP/Getty Images

In a historic collapse, retail spending in the U.S. nosedived again last month, dropping a record 16.4% as people avoided restaurants, bars, stores and malls during the coronavirus pandemic.

Retail sales are a major part of the economy, which has been battered by tens of millions of layoffs, and April’s plunge broke the record set just a month earlier. The Census Bureau has been tracking sales since 1992. The measure includes spending on gasoline, cars, food and drink.

Friday’s data showed a growing division between online retailers and other types of companies that remained closed, fired or furloughed staff and lost sales. Even grocery stores declared “essential” — which have seen huge demand and even hiring sprees — showed a slowdown in spending.

Here’s how spending drops affected different parts of retail in April:

  • Online (nonstore) retailers: +8.4%
  • Grocery stores: -13.2%
  • Restaurants and bars: -29.5%
  • Clothing and accessories stores: -78.8%

Economists have warned that many retail stores would not make it through the pandemic, especially smaller chains and companies that had weak financial footing before the health crisis. One recent survey found a quarter of clothing retailers wondering whether they’ll make it till the holidays.

Preppy fashion store J.Crew and luxury department store Neiman Marcus became the first two major retailers to declare bankruptcy during the pandemic, tipping over from their pre-existing debt. Others are likely to follow, including the suburban-mall staple J.C. Penney.

Some non-essential stores and malls began reopening this month as more mayors and governors are lifting shelter-at-home restrictions. Shopping centers are restricting the number of visitors, closing off play areas and some fitting rooms, investing in air purifiers and hand sanitizer stations — even turning parking lots into drive-in movie theaters.

But unemployment is now at 14.7% — the highest rate since the Great Depression — and expected to soar further. And surveys show that many shoppers remain leery about going back to casual mingling and browsing, at least for a while. A lot hinges on the virus and testing as well as progress with vaccinations and treatments.

“Anxiety and fear are very strong emotions and consumer behavior may take time to adjust,” Jack Kleinhenz, chief economist at the National Retail Federation, wrote in his latest economic review. “But in the end, shopping is more than a transaction. It is a social activity that is part of the fabric of American life.”

The NRF has warned, however, that the severe damage on the U.S. economy would continue showing up in economic data in the second quarter. For example, even as Chinese factories and U.S. stores began to reopen, the NRF flagged a continued slowdown in merchandise imports arriving at U.S. ports.

That’s why economists are also warning about a potentially devastating holiday season. Stores and brands typically begin preparing for the all-important end-of-the-year sales around now. But the pandemic is causing many of them to delay new orders, sock away some of the spring fashions and wonder how the world might look by then.

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