National Retail Federation CEO Matthew Shay said he wants to make sure smaller businesses can make a comeback too as retail sales rebounds. Tuesday on CNBC’s “Squawk Box”, he said, “they get hit harder and they get hit first and so we need to bring them back quickly.”
A government report given last Tuesday morning stated that retail sales increased by 17.7% in May. That comprises online purchases, as well as those at traditional face-to-face restaurants, bars and stores. It’s the keenest rise on the record in a month.
May retail purchases were only down by 1.4% juxtaposed with a year ago, without including food services. This is according to an analysis by Moody’s Investors Service. That’s “an astonishing feat considering most of the non-essential retailers were still shut for a good part of May,” said Mickey Chadha, vice president at Moody’s.
During the peak of the pandemic, stay-at-home orders imposed many businesses to close their doors temporarily to sedate the spread of the coronavirus. Permitted to operate were grocery stores, pharmacies and other establishments considered essential retailers. The rest had to shift to online operations or give up all of their deals.
An increasing number of retailers have filed for bankruptcy because of the challenges brought by the pandemic. This lncludes J.C. Penney, J. Crew and Neiman Marcus.
Shopping malls were back to operation and more restaurants have offered roadside pickup or permitted limited dining in recent weeks. But since millions are still unemployed, laid off or experiencing pay cuts, Americans’ shopping habits are difficult to predict.
Shay’s heartened to see customers buying again as stay-at-home purchases lift. After staying at home during the pandemic, he said “there was significant pent-up demand” among Americans. This includes many who had more money because of the government stimulus checks. Federal aid and unemployment benefits “provided a big jolt that we needed,” he added.
Still, he admitted that the bounce back is uneven. Big retailers have had strong sales and they didn’t have to close amid the pandemic. However, smaller businesses are still in struggle.
“The big question will be what happens to those small, independent, those midsized companies,” he said. “Can we get the rest of the economy moving quickly enough that we can bring the small businesses along?”
According to the Commerce Department’s report, the May figures are an encouraging uptick after retail purchases fell by a revised 14.7% in April. The most abrupt drop in April was at clothing stores.
As businesses resume, some return to work, and summer activities resume, coronavirus cases are increasing across nearly half of the states and hospitalizations are high as well.
Shay said independent and smaller businesses need to constitute for deals they lost, if they’re going to make it. He said essential sellers who remained open in the early weeks of the pandemic have shown that “the mere act of being open is not unsafe.”
“Keeping the economy open, I think, is going to be the best relief for these small businesses,” he said. “We can’t go into lockdown mode again.”
Source: CNBC