Retail sales in May were down slightly from April of this year but significantly higher than in May 2020, according to a new report from the U.S. Department of Commerce. While the decline in retail sales could be attributed to many factors, retail experts are still predicting a strong recovery as pandemic restrictions ease.
Retail and food services sales were down 1.3% overall in May 2021 when compared to April 2021, but up 28.1% compared to May 2020.
“Even though there was a slight decline, I think the overall trend is that retail sales are rebounding as we continue to emerge after the pandemic,” said Katie Essing, a marketing professor at the University of Missouri.
Clothing and clothing accessory revenue increased dramatically compared to May of last year as more workers return to in-person work in offices.
“Since a good deal of people could work at home, they hadn’t really caught up on their clothing or accessory purchases,” said David Overfelt, president of the Missouri Retailers Association.
The slight decreases in revenue could be attributed to many factors. Supply chain problems have plagued purchases of furniture, automobiles and electronics, decreasing sales.
“When we see the declines, if you really start to dig into it, a lot of it is due to supply chain issues,” Essing said. “So things like not being able to get furniture right away, or automobiles or certain electronics — like the supply chain impacts that we’re still facing — are having an impact on sales.”
Overfelt said the decrease in spending might be attributed to fewer people having federal stimulus money left to spend. The U.S. saw a 10.7% surge in retail spending in March, when a third round of stimulus checks were issued to thousands of Americans.
“I know I spent mine,” Overfelt said. “I bought things I didn’t need. I’m sure there was a lot of people like me, too.”
According to the report, sales in food services were up 70.6% in May compared to last year. Essing said Americans want to seek out places to gather and meet friends and family as vaccinations increase, driving demand for businesses like restaurants, coffee shops and bars.
“Those places where customers are wanting to gather again, have that experience of meeting with their friends and family, that’s where we are seeing this pent-up demand and spending,” Essing said.
While rising inflation could impact long-term retail revenue if permanent, experts say they are confident in the continued growth of retail sales in the coming year.
“If we turn back the clock to where we were in May 2020, we were still facing a lot of lockdowns and working from home and that was changing how people were going out to eat, not getting lunch, not getting that coffee, maybe not buying the clothing that you might normally do for going out or going to work,” Essing said. “And now that we are reopening, people are ready to do that again.”