almost 4 years ago • 2 mins
In dramatic scenes not seen since a teenager set off a stink bomb in the food court, new data showed the coronavirus lockdown prompted the biggest drop US retail spending ever 🙈
According to Friday’s report, revenue at stores and restaurants fell by a greater-than-expected 16% in April – almost double the drop in March, the previous record-holder. But shoppers weren’t picky about where they cut spending, with furniture dropping 59%, electronics 61%, and clothing a massive 79%.
With so many stay-at-home orders in place, it’s little wonder retailers were hit hard. Plenty of them – like fashion brand J. Crew – have gone under, and department store JCPenney followed suit just last week. The Federal Reserve (the Fed) has now stepped in, starting with an unprecedented program of corporate bond purchases 🏦 And given that many retailers rely on selling bonds – rather than tapping bank loans – to fund their operations, the Fed’s hoping the move will bring down the cost of borrowing and keep them chugging along.
March’s grocery sales had benefited from the stockpiling that preceded the lockdown, but internet shopping was the only retail category to grow last month. And even then, sales were pretty tepid 😕 That suggests that even without restrictions on visiting malls and restaurants, many Americans would’ve pulled back on their spending – what with the whole risk of unemployment and all.
Other data out on Friday suggested April may have been the bottom for American numbers: initial May reports showed pick-ups in consumer sentiment and manufacturing activity, albeit from very low bases. Better-than-expected results from Chinese ecommerce giant JD.com, meanwhile, gave some hope that consumer confidence can return to post-lockdown nations 🛍 If disappointing sales at luxury conglomerate Richemont are any guide, mind you, it may be a while before consumers are confident enough to splurge $10,000 on a watch…
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