Consumer Behavior

NRF: Sales improvement is an encouraging sign

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June 18, 2020

The bump in retail sales last month is "encouraging news," according to the National Retail Federation, and the focus now must be on keeping retail stores open for business.

While sales spiked considerably compared to April, up 17.7%, the figure is still well below spend same time last year, according to a NRF press release.

"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," NRF Chief Economist Jack Kleinhenz said in the release. "But full recovery is still a long way off. 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."

"What we need to look at is the trajectory of employment and the direction of the virus. There's hope for a turnaround in the economy in the third quarter, but if the virus has a reawakening, we're going to see some serious situations for consumers," added Kleinhenz in the release.

Every category of retail saw month-over-month gains, according to NRF. Specifics from key retail sectors in May include:

• Clothing and clothing accessory stores were up 188% month-over-month seasonally adjusted but down 63.3% unadjusted year-over-year.
• Furniture and home furnishings stores were up 89.7% month-over-month seasonally adjusted but down 23.2% unadjusted year-over-year.
• Online and other non-store sales were up 9% month-over-month seasonally adjusted and up 25.3% unadjusted year-over-year.