“Did the Pandemic Change Retailing Dramatically?” by Jan Rogers Kniffen via The Robin Report

“Did the Pandemic Change Retailing Dramatically?” by Jan Rogers Kniffen via The Robin Report

Any professional observer of retail trends and every shopper in the U.S. would tell you that retailing, and retailers changed dramatically during the pandemic. But many of those changes were already in the works before the pandemic even started. One of the interesting things that happened during the pandemic is that Amazon announced the closure of almost all their test stores that were in the works. On the surface, one might think that online retailing charged ahead so rapidly during the pandemic that Amazon decided to withdraw from stores altogether, concluding that the world had passed brick-and-mortar stores by. Well, there is no doubt that online selling charged ahead during the pandemic. It went from about 9 percent of retail sales to over 18 percent in that short (very long living through it) pandemic period. But Amazon’s move to close stores and try “something new,” which right now seems to be a 30,000 square-foot department store, seems to be driven by the poor consumer reception to the various test stores tried so far, not a belief that stores are not still important. 1/ The Physical Store Actually Became More Important My conclusion is that despite the explosion of online selling during the pandemic, stores became even more important as retailers realized that physical stores were going to be great support for online retailing going forward. They saw the billboarding effect of the store was real, using the store as a distribution center was necessary and using the store as a customer service center for online sales was a requirement. Despite Amazon arguably (some experts would say unarguably) being the very best online retailer in...
“U.S. Retail Sales Grew 0.9% in April – Retail spending rose for the fourth straight month as inflation remained high” by Harriet Torry via The Wall Street Journal

“U.S. Retail Sales Grew 0.9% in April – Retail spending rose for the fourth straight month as inflation remained high” by Harriet Torry via The Wall Street Journal

Americans continued to pump money into the U.S. economy in April, with increased retail spending offering the latest sign consumers are driving demand at stores and manufacturers despite the pinch from high inflation. Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 0.9% last month compared with March, the Commerce Department said Tuesday. That marked the fourth straight month of higher retail spending.Monthly percent change in retail sales. Source: Commerce Dept via St. Louis Retail sales aren’t adjusted for inflation. That means that while consumers have continued to spend more, they are getting less due to rapidly rising prices. Consumers spent more at restaurants and bars and boosted expenditures on vehicles, furniture, clothing, and electronics. They cut spending sharply on gasoline in April as pump prices pulled back briefly from a run-up related to the war in Ukraine. In another sign of economic momentum, the Federal Reserve said industrial production, a measure of factory, mining and utility output, increased a seasonally adjusted 1.1% in April—also a fourth month of gains. U.S. retail and food services. Source: U.S. Census Bureau via St. Louis Fed Note: Seasonally adjusted.RECESSION2020 $700million Economists said the figures showed the highest U.S. inflation in four decades and uncertainty from the Ukraine war haven’t deterred consumers from spending, which makes up the bulk of economic output. The U.S. is also experiencing a historically tight labor market—with April marking the 12th straight month of solid job gains—adding to positive signs for the second-quarter performance by the U.S. economy. “Today’s numbers suggest that domestic demand momentum is very robust,” said ING economist James Knightley. That gives the Fed a green light...