Retail sales see largest monthly drop on record amid COVID-19 pandemic
MILWAUKEE, Wis. (CBS 58)-- The National Retail Federation says retail sales saw the largest monthly drop on record in March because of the COVID-19 pandemic, and non-essential retailers are taking the burden of the impact.
Experts say 25-percent of small independent retailers don’t feel they have the means to go two months without sales and still have their business survive, but it’s not just small retailers. Large scale retailers are also feeling the impact, some with debt looming even before COVID-19.
Retail futurist, Doug Stephens, says it’s almost inevitable we’ll see a number of retail closures in the near future.
“We’ve already started to see retailers looking into rate abatement or some not paying rent, so we begin to see the dominos begin to fall here of where that pain now gets spread through the economy,” said Doug Stephens, Founder and CEO of Retail Prophet.
He says department stores may become retail history.
“The department store chain has been under pressure for decades and I believe that this will be the final nail in the coffin for many of them,” adds Stephen.
Right now a majority of customers are shopping retail online because of non-essential store closures, but Stephens says customers will eventually desire going back to a physical store.
“We can expect that there will be a return,” said Stephens. “It will be slow, it will be incremental, but at the end of the day we’re social creatures and I think we do desire social and physical connection.”
Lead Entrepreneurship Professor at Milwaukee Area Technical College, Armen Hadjinian, says businesses in the area must re-identify and adapt to using technology to reach customers.
“Some will come out stronger and some will come out weaker,” adds Hadjinian.
He says it’s especially important for specialty and niche stores.
“When you consider the power of the internet, now that specialty store can reach anyone in the world,” he says.
Stephens says retail is the largest employer of any industry in America, and it is crucial state and federal help come through to keep retailers alive.
“If we allow the amount of closures to take place here that eventually could, it could truly be a decade before we can get back to the high water mark,” said Stephens.
Even with the retail industry facing an unprecedented time, experts say the ‘buying local’ movement is gaining traction. Customers are now being trained to put their orders online or through the phone to purchase items via curbside pickup or delivery.