How the lockdown is affecting your wallet

These unprecedented economic times are turning normal shopping and saving patterns on their heads.

Whether you work in hospitality or healthcare, finance or education, you've surely felt the effects either in your industry or in your personal life.

Overall, U.S. retail sales dropped by a record 16.4% from March to April as business shutdowns caused by the coronavirus shellacked stores big and small. Unfortunately, many were already in a precarious state pre-pandemic thanks to stiff competition from Amazon.

Nearly $1 of every $5 spent at retailers last month went to non-store retailers, signaling a definite shift toward online shopping.

With exception to online, not a single retail category was spared in April. Furniture stores and appliance/electronics stores absorbed whopping losses of 60% or more. Car dealers saw a plunge of 13%.

Even clothing retailers have been walloped.

Clothing-store sales sagged 79% and department stores 29%. In recent weeks,
J.Crew, Neiman Marcus, Stage Stores, and J.C. Penney have filed for bankruptcy protection. Other retailers are expected to follow suit.

There has been one bright spot: Sales of pajamas surged 143% between March and April, which clearly indicates the attire of choice for those working from home.

Such news goes hand-in-hand with the fact that sales of pants have fallen 13%, while sales of bras are down 12%. Comfy is the new cool, to be sure.

Restaurants, some of which are already starting to close permanently, witnessed a nearly 30% decline in spite of the move toward takeout and delivery orders.

After panic buying in March, grocery sales fell 13%. Still, that doesn't mean groceries have gotten any cheaper.

In fact, the average bill on a single grocery store trip has increased by $34 -- from $61 to $95 -- a 55% spike since pre-coronavirus times.

Prices at the grocery store also rose 2.6% last month — the biggest jump since 1974.

And if you've never been big on saving, chances are that's changed in recent months.

Because of layoffs, furloughs, and uncertainty over their jobs -- not to mention price increases/gouging -- consumers are doing everything in their power to cut spending and build a safety cushion.

The savings rate in the United States climbed to 13.1% in March from 8% in February, marking the highest savings rate since November 1981.

While several states have begun to ease restrictions, it may take years for many retailers and consumers alike to recover.

Comments

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