Retail sales plunged historic 8.7% as coronavirus pandemic forces prolonged shutdown
COLUMBUS, Ohio (WSYX/WTTE) — Retail and food service sales have dropped a record-setting 8.7% in March, as the coronavirus pandemic forced a nationwide shutdown of brick-and-mortar stores and restaurants.
March's drop, which is compared to February's 0.5% slip, more than doubles the previous record: a 3.9% drop in retail sales logged in November 2008, the height of the recession.
"One of the major concerns we should have are that a lot of the non-essential stores and retailers were still open most of March," Dr. Doug Ross, professor and Business Administration Program chair at Franklin University, said.
According to the U.S. Department of Commerce, car sales are down 25.6%, clothing sales are down a hefty 50.5%, while restaurants--many surviving on delivery and takeout--are down 27% in sales compared to February.
Dr. Ross fears small businesses may be at the most risk of financially sinking, saying 75% of small businesses only have the ability to meet expenses for two months. The other 25% can only last for one month. Conversely, Ross believes most major big-box names will survive the pandemic's financial burdens.
Major names headquartered in Central Ohio; L Brands, Abercrombie & Fitch, Big Lots, Express, and more are furloughing employees from stores and corporate offices, cutting pay for senior executives and board members, and growing their cash reserves.
'For the large firms, that's a really great strategy," Ross said. "They have the capital, and the resources that they can approach that kind of strategy."
However, change may still be inevitable despite survival.
"I think we’ll see a lot of the stores that were predominantly mall based become more and more online based," Ross said. Which may align with people being weary of entering brick-and-mortar locations as we eventually, and slowly, stop social distancing.
"When we think about consumer behavior and how people purchase and consume products, this will change forever."
