We have been actively researching what coming out of this crisis looks like for retail.
Once the lockdown is over, some Americans will go out and splurge. But most will not.
Many have lost jobs, had wages suppressed, and are worried about their finances. They will cut back.
Once the lockdown is over, some Americans will go out and splurge. But most will not.
Many have lost jobs, had wages suppressed, and are worried about their finances. They will cut back.
In other questions, we have found that some Americans - mostly older - feel concerned about going out even when the lockdown is lifted. Their spending will also be suppressed post-lockdown.
For a lot of consumer groups, it will take time before spending normalizes.
For a lot of consumer groups, it will take time before spending normalizes.
In tracking these groups over time, the spending below average segment is growing; the spending above average segment is shrinking.
So the outlook is getting worse the longer this drags on, which makes sense.
So the outlook is getting worse the longer this drags on, which makes sense.
And look at those terrible numbers for apparel! It will be the worst-hit sector.
And even those buying clothing will be greeted by a raft of discounting (not good for sales growth or margins) and potentially products that are no longer seasonal. That's going to hurt retailers.
And even those buying clothing will be greeted by a raft of discounting (not good for sales growth or margins) and potentially products that are no longer seasonal. That's going to hurt retailers.
One of the things consumers are most keen to do when this is over is to socialize again, especially with meals out.
We don't track that on this chart as it's not core retail. But nevertheless, it's one of the spending areas people will prioritize.
Retail will lose out.
We don't track that on this chart as it's not core retail. But nevertheless, it's one of the spending areas people will prioritize.
Retail will lose out.
Bottom line: retail does not bounce back to normal when the lockdown is lifted. This crisis isn't a stage show that ends when the curtain falls.
It will have a lingering impact and retailers need to be prepared to deal with the aftermath. Hard to do when many have lost money.
It will have a lingering impact and retailers need to be prepared to deal with the aftermath. Hard to do when many have lost money.
On a positive note, the situation won't last forever and US retail is capable of entering a period of relative normalcy by the year-end. However, that is very dependent on the timing of the virus peak, government stimulus to those affected, and other factors. So a moveable feast.
