Page 29 - bon-dia-aruba-20200617

A29
BUSINESS Wednesday 17 June 2020
U.S. shoppers returned with vigor in May in partial rebound

By JOSH BOAK and ANNE historically high 13.3% by
D'INNOCENZIO AP Business the government's standard
Writers measure and an even
BALTIMORE (AP) — Ameri- worse 21.2% by the broad-
can shoppers ramped up est gauge of unemploy-
their spending on store pur- ment. For now, Americans
chases by a record 17.7% are spending dispropor-
from April to May, delivering tionately more on essentials
a dose of energy for retail- and less on luxuries.
ers that have been reeling The lockdowns sent many
since the coronavirus shut mall-based chains further
down businesses, flattened into peril. These retailers fur-
the economy and para- loughed workers, slashed
lyzed consumers during the costs to preserve dwin-
previous two months. dling cash reserves and, in
The government's report the cases of Neiman Mar-
Tuesday showed that con- cus, J.Crew and JC Pen-
sumers' retail purchases ney, filed for bankruptcy
have retraced some of the protection.q
record-setting month-to-
month plunges of March
(8.3%) and April (14.7%) as A passer-by holding a mobile device walks past a store window, Tuesday, June 16, 2020, in Cam-
businesses have increas- bridge, Mass.
ingly reopened. Still, the Associated Press
pandemic's damage to re-
tailers remains severe, with and congregate in groups, buildings materials and smaller businesses remain
purchases still down 6.1% how many businesses man- groceries. Building materi- under pressure. Their stress-
from a year ago. age to stay open and rehire als stores posted a monthly es in part reflect changes
Last month's bounce-back many workers and whether gain of 11% last month and emerging as social distanc-
by consumers comes the government provides year-over-year growth of ing has become essen-
against the backdrop of an additional support. 16%. Shoppers have in- tial and shopping habits
economy that may have "While the big increase in creased their grocery pur- evolve.
begun what could be a retail sales in May is encour- chases by an annual 14%, One such retailer, CPW,
slow and prolonged re- aging, there is still a huge with fewer of them dining a women's clothing store,
covery. In May, employers amount of uncertainty at restaurants because of has been in business for
added 2.5 million jobs, an about the strength of the the pandemic. 30 years on Manhattan's
unexpected rise that sug- rebound," said Gus Fau- Shoppers last month vastly Upper West Side. A three-
gested that the job mar- cher, chief economist at increased their spending month shutdown resulting
ket has bottomed out. Still, PNC Financial Services. "It in other categories, too, from the virus meant the
a big unknown is whether depends on a lot of factors though some of these sec- store retained only 20% to
early gains in job growth, outside of the economics." tors still face a dim future 30% of its sales as the own-
retail sales and other ar- The virus-induced recession given the blows they ab- er, Linda Wolff, packed
eas can be sustained in the not only diminished spend- sorbed in March and April. and delivered orders to
coming months or whether ing in most sectors of the Clothing purchases soared customer homes. Though
they may plateau at a low economy. It has also ac- 188% from April to May but CPW reopened for curb-
level. celerated shifts in where remain down 63% over the side pickup a week ago,
"This may very well be the people shop and what past 12 months. Though Wolff said she hasn't rung
shortest, but still deepest, they buy. The changes consumers ramped up up a single such sale.
recession ever," said Jenni- forced by the coronavirus their spending at furniture "This is my heart and soul,"
fer Lee, a senior economist have aided online retail- stores by 90% last month, she said. "I am exhausted
at BMO Capital Markets. ers and building materials sales remain down more from all the worrying."
But she added that it's "not stores and other outlets than 21% year over year. Some national chains, by
likely that we'll see a repeat that stayed open during The same pattern holds contrast, say they have
in June as this is pent-up the outbreak. Other busi- for restaurants, electronics so far avoided their worst
demand unleashed in one nesses are facing persistent stores, department stores fears. Macy's CEO Jeff
month." financial strains. and auto dealers. Gennette has said that
The return of shoppers last Extending an ongoing shift Americans' retail purchases his company's reopened
month was likely aided by in shopping habits, Ameri- account for roughly half stores are regaining 50% of
the $3 trillion in rescue mon- cans last month stepped of all consumer spending, their typical business. Teen
ey that the federal govern- up their purchases at non- which fuels about 70% of retailer American Eagle
ment has provided to com- store retailers, which in- total economic activity. Outfitters is faring even bet-
panies and households. clude internet companies The rest of their spending ter, averaging roughly 95%
Americans' retail purchases like Amazon and eBay, by includes services, from cell- of its normal sales levels.
would need to surge by an 9% after boosting such pur- phone and internet con- But analysts caution that
additional 9% to return to chases nearly 10% in April. tracts to gym memberships some of the gains in Ameri-
their level before the pan- This category of sales is up and child care. cans' retail spending thus
demic. a sizable 31% from a year Nearly 80% of small re- far probably reflect the im-
Any sustained recovery, ago. tailers and restaurants pact of temporary govern-
though, will hinge on an ar- When consumers do make tracked by the scheduling ment aid and expanded
ray of factors: The path of purchases at physical tool Homebase that were unemployment benefits in
the coronavirus, how willing stores, they're increasingly closed in mid-April have the face of a deep reces-
people are to shop, travel doing so for such items as since reopened. Yet these sion. The jobless rate is a