How Coronavirus Changed the Retail Landscape

The coronavirus epidemic triggered a major shift in the retail industry. Traffic in the shops evaporated. Online credit-card transactions increased. E-commerce sales in the second quarter grew 44.5% compared to the same period in 2019 and they now make up 16% of all US retail sales according to the Department of Commerce.

Many cities and states began lifting lockdown restrictions and consumer spending was raised to allow reopening in May, but only a few areas have regained lost land. Sales, profits and many grocers and home-improvements are working at retailers. Many apparel vendors have laid off employees and closed shops for good. According to mobile-device location data from foot-traffic analytics firm, weekly traffic from July to the second week of September is on average 14% lower than the year before.

online shopping

The epidemic pushed several last online-shopping holdouts on the e-commerce hump. According to weekly transactions collected by financial-data firm Factus, online transactions with credit and debit cards have increased by an average of 88% each month since early April.

Home depot Inc.

Said online sales doubled in the second quarter, while Dick’s Sporting Goods Inc.

The retailer’s online sales nearly tripled in the same period.

Shop closed

Big retailers like Jessie Penny Co.

, Neiman Marcus Group Inc., GNC Holdings Inc.

And Brooks Brothers Inc. filed for bankruptcy protection, and each of them closed hundreds of stores. Since April, some 5,000 US stores have closed their doors for good. About 680 new stores were opened during the same period, according to Corsight Research. Only in August, around 2,200 retail stores closed while only 14 opened.

Retail Sales

According to monthly data from the Commerce Department, US retail sales have been steadily increasing since the end of May, although several categories are still struggling. The nonstore retailer category, which includes online merchants, maintained the highest growth rate since the onset of the epidemic, with an average growth of 22.6% between March and August in 2019 compared to the same period. There was a 31% increase in grocery stores. March compared to a year ago, but growth has been slow since then.

Sporting-goods shops recovered the most rapidly and surpassed their 2019 sales numbers, but growth was moderate in July and August. Since March, clothing stores have not recovered, with an average sales decline of 44% in the month.


The initial claim for the benefit of the unemployed, stable at 870,000 last week, reveals a loss of momentum in the labor market recovery. Retail is an area where job loss can be permanent. Monthly data from the Department of Labor showed that employment of sporting goods retailers remained at less than 20% in August last year, although monthly sales have risen by about 17% on average since June.

Clothing stores had the worst employment rates in July, with a drop of nearly 29% compared to the same month in 2019. During her most recent earnings call, Macy’s Inc.

It said that there was a permanent reduction in its workforce of 3,900 and that almost all the employees who were behind had returned to work.

profit margins

A sudden change in consumer habits changed the picture of profit for retailers in the S&P 500. ebay Inc.

According to an analysis of FactSet data, its profit margin increased the most in the second quarter compared to the same period last year. Other winners were automotive and discount chains, which managed to boost profitability despite high costs of operations in an epidemic.

Those who relied heavily on in-store shopping saw a decrease in profits in the second quarter. Luxury brands such as tapestry Inc.

And Ralph Lauren were among the worst performers, falling by 51% and 34% respectively.

Write Inti pacheco at [email protected]

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