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June Retail Sales Climb 6.4% Over May, Jump 5% Over June 2019

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Buoyed by store reopenings and unemployment benefits supplemented by the federal government, U.S. retail sales for June increased 6.4% compared to May, according to U.S. Census Bureau figures. Perhaps even more surprising given the negative impacts of COVID-19, June 2020 retail sales were 5% higher than they were for the same month last year. Online sales continued their strong growth trajectory, increasing 23.5% this past month compared to June 2019.

However, it’s unlikely the upward trend will continue into Q3, particularly given the recent spikes in coronavirus cases that have forced several states to re-impose shutdowns. Companies including Apple and McDonald’s have had to re-close physical locations to deal with the pandemic’s effects.

Total retail sales, which include food service, also grew in June, to $524.3 billion, a 7.5% jump compared to May 2020 and a 1.1% increase compared to June 2019.

Retail’s strong performance in June “demonstrates the amazing resilience of the consumer in these unprecedented times, as the economy begins to open and government closure mandates for discretionary retailers are lifted,” said Mickey Chadha, VP at Moody’s in comments provided to Retail TouchPoints.

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“We are cautiously optimistic that this trend will continue, but recent surges in coronavirus infections in hotspots across the country and the expiration of government stimulus programs could put a damper on the recovery in the overall retail sector in the coming months,” Chadha added. “However, we do expect online sales to continue their extraordinary upward swing as consumers get comfortable adding more product categories on their online shopping list.”

National Retail Federation (NRF) Chief Economist Jack Kleinhenz noted that there’s still a high degree of uncertainty about retail sales and the economy in general: “How durable the improvement in retail spending will be is directly related to how widespread the resurgence in COVID-19 cases becomes,” said Kleinhenz in a statement. “All eyes are on the infections that are accelerating in many parts of the country and they pose a serious threat to recovery.

“Recoveries do not proceed in a straight line and no two are alike,” Kleinhenz added. “The current economy is far from normal and will require a lengthy period to absorb job losses and build up to where it was before. Government aid for consumers and businesses has helped, but additional relief is warranted to sustain the consumer spending that is the backbone of our economy.”

NRF Seeks National Action On Face Coverings

To contain the spread of COVID-19, the NRF has called for all retailers to adopt nationwide face covering/mask policies, as Walmart and several other retailers have done. “NRF applauds the leadership of companies like Walmart, Starbucks, Best Buy, BJ’s Wholesale Club, Apple, Qurate Retail Group, Costco and others that have implemented nationwide mask mandates,” said the association in a statement.

Additionally, the association has co-signed a letter with the U.S. Chamber of Commerce, the Business Roundtable and other industry groups that calls for a national mask standard. The letter was sent to President Trump, Vice President Pence and governors around the U.S.

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