The U.S. retail sector was buffeted by the pandemic in extreme and unusual ways, with some sectors seeing extraordinary slumps even while others saw consumers spending at a record pace.
The Commerce Department released retail sales data for December, providing for the first time a look at the full year’s sales. The report is Dickensian: the best of times for some businesses, and the worst of times for others.
The devastation visited upon restaurants and bars is well-known. These were hit with orders to close entirely in March—and in many places only partially reopened later, ordered to serve food only outside or to a greatly diminished capacity for diners. In city centers with vacant office towers, once crowded lunch spots stood empty. Business meals vanished altogether. As well, many Americans were wary of eating out, fearful of contracting the virus. Customer receipts in 2020 fell 19.5 percent.
This sent Americans rushing into grocery stores to prepare food at home. Full-year sales in grocery stores jumped 11.9 percent.
It’s not unusual for one sector of the economy to suffer more than others in an economic slump The dot com bust hurt the nascent digital economy worse than the real economy and burned investors in young tech companies. The housing bubble and financial crisis were devastating for real estate, construction, and many in finance lost their jobs as their firms collapsed or were swallowed by competitors.
What is unusual is for some sectors to thrive during a slump. But that’s what happened in the pandemic.
Nonstore retailers, which includes Amazon and other online shops, saw sales jump 22.1 percent. Department stores, many of which were forced to close for weeks or months, saw an 18.1 percent decline in sales.
Sales in the category that includes sporting goods, hobby, musical instrument, and book stores jumped 5.7 percent as Americans bought goods for working out and crafting at home.
Sales at building materials outlets, home improvement stores, and garden centers soared 14 percent. But furniture shop sales dropped 5.4 percent despite many Americans buying desks and chairs to work from home. It’s likely many of those were online purchases.
Electronic and appliance store sales slumped 14.6 percent. This too may be due to sales shifting to online retailers. Many of these stores, including Apple’s shops, were closed for weeks or months this year.
Apparently, we do not dress up much when we’re stuck at home. Sales at clothing stores fell 26.4 percent, making these the hardest-hit category for 2020.
Motor vehicle sales rose 1.1 percent for the year, with the rise concentrated in the latter half of the year. It’s likely that sales would have been up by even more if manufacturers had been able to keep up with demand but the spring-summer shutdown left many car and truck dealers with shortages.
Sales at gas stations plummeted 15.9 percent, driven down by ultracheap fuel, work-from-home eliminating commuting, and stay at home orders discouraging travel.
Some of the changes in consumer behavior—less dining out—were expected. Others—huge sales at home improvement stores and garden centers—were not.
At the end of the year, the trends look set to continue. Auto sales in December 2020 were 10.1 percent above the December 2019 level. Bar and restaurant sales were down 4.5 prcent.
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