NRF Reports May Sales Rebound But Full Recovery Is Still Ahead

Retail sales saw impressive increases in May as retailers began the reopening process, but they still remain well below those of a year ago, according to the National Retail Federation (NRF). The organization calculated that seasonally adjusted retail sales, excluding automobile dealers, gas stations and restaurants, increased 11% over April 2020, and were up 1.7% unadjusted on a year-over-year basis.

In comparison, the U.S. Census Bureau reported May retail sales up 17.7% compared to April, but down 6.1% year-over-year. The difference in both figures was attributed to the fact that sectors hit hardest by COVID-19, such as the restaurant industry, are included by the Census Bureau but excluded from NRF’s core retail calculations.

“Today’s sales report is very encouraging news at a time when we need to focus on what will happen as retail doors open once again,” said Matthew Shay, President and CEO of NRF during an interview on CNBC’s Squawk Box. “For a sick economy, there is no better medicine than retailers responding to consumers who are ready to safely return to stores. These sales numbers do not reflect the same strength we had going into the pandemic, but they certainly reflect the trajectory we need coming out of it.

“The most important thing now is to keep these retail stores open for business and not penalize them by closing their doors in the event of a coronavirus surge,” Shay added. “As those stores that remained open – our economic first responders – have shown, retailers have developed solutions that protect the safety of their customers and associates, and they are sharing those lessons to the benefit of store owners large and small in communities across the country.”


NRF Chief Economist Jack Kleinhenz noted that comparisons to April numbers need to be understood in context: almost everything was shut down during the prior month, so huge increases in spending don’t mean a full recovery has been achieved. Even though consumer confidence is improving, shoppers are struggling with high unemployment, and confidence remains at recession levels.

“Going forward, wallets are primed, increased foot traffic shows that consumers are returning to stores, and retailers are ready to meet their demand, but we are likely to remain on a roller coaster for a while,” said Kleinhenz in a statement. “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.”

Some of the key findings in the NRF data include:

  • Clothing and accessory stores were up 188% month-over-month seasonally adjusted, but down 63.3% 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;
  • General merchandise stores were up 6% month-over-month seasonally adjusted and up 1.6% unadjusted year-over-year; and
  • Grocery and beverage stores were up 2% month-over-month seasonally adjusted and up 14.3% unadjusted year-over-year.

These results match what experts have been saying about Q1 2020 results: essential retailers with agile, convenient online operations have been faring the best during these difficult times. They will also be well-positioned to continue growing as the industry recovers.

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