U.S. retail sales plunged by a record amount in March as coronavirus lockdowns kept consumers out of stores in almost all sectors, leaving only grocers, pharmacies and home centers posting gains.
The Commerce Department reported Wednesday that retail sales fell 8.7% last month, the biggest decline since the government started tracking the data in 1992. The decline was more than double the biggest one-month drop during the 2007-2009 Great Recession.
Economists polled by Reuters had forecast retail sales tumbling 8.0% in March. Compared with March 2019, sales dropped 6.2%.
“Sales fell for the second month in a row in what’s likely to be a prolonged period of agony for an industry that still relies heavily on foot traffic and customers bunched together when they shop,” MarketWatch said.
The pain was widespread, with sales falling 27% at auto dealers and 17% at gas stations, two of the biggest retail segments. Receipts plunged 50% at clothing stores, 26.5% at restaurants and 20% at department stores.
On the plus side, grocery sales leaped 27%, health and personal stores posted a 4.3% increase, and home centers were up 1.3%. Online and mail-order retail sales surged 3.1%.
“The only real winners were grocery stores, who benefited by the frenzied spending by shoppers who stocked up in anticipation of an extended lockdown,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.
So-called core retail sales increased 1.7% after a downwardly revised 0.2% drop in February.
“Despite March’s increase in core retail sales, economists are forecasting consumer spending plunging at an annualized rate of at least 5.0% in the first quarter, which would be the weakest performance since the second quarter of 1980,” Reuters said.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 1.8% pace in the fourth quarter.
“Clear signs of panic buying of necessities and the fact that lockdowns were introduced only around the middle of the month means that far worse is to come in April and the second quarter more generally,” said Michael Pearce, senior U.S. economist at Capital Economics.
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