Retail Is Up – Depending On What You’re Selling
Move over take-and-bake pizza, Americans are ready to shop again. Fueled by $1400 stimulus payments and for some, relief that vaccines are now available as of April 19th to every American that wants it, retail sales surged 10.7% in March according to a report from the Monthly Sales for Retail Trade and Food Services report.
Cooped up shoppers sought avenues to relieve their boredom as warm spring weather had patios across the nation booming. Sales at restaurants hit $62.2 million in the month of March, up 13.4% from February, and at their highest levels since the pre-pandemic high of $65.3M in February 2020. Not only that, but many specialty stores are also seeing seasonal spikes after a down, cold February.
· Sporting Goods (+23.5%)
· Clothing Stores (+18.3%)
· Car Dealerships (15.1%),
· Department Stores (+13.0%)
· Building Supply (+12.1%)
But despite the positive trends, not everyone is seeing the windfall. A positive but disappointing jobs report for April announced on May 7th suggested hiring is struggling to keep pace with consumer demand. Job gains are up 266K but unemployment grew from 6.0% to 6.1% as even with workers reentering the workforce, many employers are reporting they’re having a hard time hiring. And into April those same sales growth numbers hit a wall, cycling pandemic records from this time last year Total retail and foodservice sales for April were flat according to Monthly Sales for Retail Trade and Food Services report, as consumer confidence slowed somewhat after stimulus checks were spent, much on automotive purchases.
Industry to industry, trends vary wildly. Retail bar and dining establishments added 187,000 jobs in the past month, while grocery and delivery services actually fell. That means that business such as Walmart and Sam’s, which experienced massive consumer demand through the pandemic, are likely to see a slowdown this corner. Syndicated data from IRI shows many categories that excelled during the pandemic showing their first declines in a year. Though many are still ahead of sales trends from 2019, deli meat, cheese, bakery, produce, meat and seafood all fell during March, from their panic-buying highs in March 2020. Many of these categories are also slowing from previous month trends in February 2021 suggesting tepid growth as consumers shift their share of wallet to restaurants and hobby stores.
Opportunities to capitalize on this consumer shift abound, even at stable retail giants like Walmart. Some behaviors, like reliance on delivery and pickup options are here to stay. Walmart announced their investment in Cruise, an autonomous vehicle company that is majority-owned by General Motors. This signals in part their commitment to “final-mile” service as consumers seek new, convenient ways to get products from shelf to pantry without leaving their home. Walmart has also been working with DoorDash for several years and has seen usage of this service explode over the last years, even if it has slowed in recent months. Making sure that content, images, and product specs are correct on Walmart’s platforms is critical to staying on top of these shifting patterns of behavior and “winning” with a consumer who is changing how they allocate their dollars.
New opportunities will continue to emerge as well for those that are paying attention. More people leaving their home means more are returning to work, traveling, and returning to the dating pool. Each of these factors are leading to growing demand for clothes, luggage, and grooming products. Home investment also continues to be a huge share of wallet, with an explosive home market as existing home sales outstrip new construction sales due to lumber shortages.
Whatever your category, Walmart remains the largest retailer in the world. Your customers are likely theirs as well. If you need strategic partnership, advice and support to approach the world’s largest retailer, feel free to reach out for a touch-base with someone at New Nexus Group. We can help you find an avenue to put your best foot forward during what is sure to be a very uncertain year for retail.