Third Stimulus Check: Supply Chain Experts Share Analysis on New U.S. Census Bureau Report
To prominent supply chain industry analysts weigh in on a new U.S. Census Bureau report showing that overall retail sales in April rose by 51.2% year-over-year.
Kearney’s Michael Brown and Coresight Research’s Deborah Weinswig shared their insights with SCMR in an interview.
The Census Bureau’s Advance Monthly Sales for Retail and Food Services show a slow but steady return to normalcy, says Michael Brown.
He is a partner in the consumer practice of management consultant, Kearney, and co-author of The Future of Shopping Centers and The Future of the Mall.
“Dramatic increase in apparel and food service sales vs. last year foreshadow what is yet to come this summer as mask mandates are lifted and the country starts to reopen,” he says.
Brown also noted that vacations, back to work and back to school will fuel demand and sales in apparel and general merchandise. However growing supply chain challenges throughout the country and conservative planning by retailers could limit how much of that demand can be satisfied.
“Retailers need to review forecasts and inventory commitments for Holiday 2021 which could be a blockbuster,” he concluded. “Waiting to see what happens this Spring will be too late for retailers to react”
Deborah Weinswig, CEO and Founder of Coresight Research, a global advisory and research firm specializing in retail and technology, observed that despite numbers being largely flat from March, April’s sales were a positive sign for retail recovery this spring and summer.
“Growth was of course very strong year over year from last April, when the pandemic caused a substantial slide in spending, but even looking to April 2019 this month stacks up well,” she said.
Overall, their measure of retail sales (which is unadjusted sales excluding food service, auto and gas) rose 22.2% from April 2019. Plus, strong March spending was driven by government stimulus checks, so keeping pace with a month where much of the country got a $1,400 check is a pretty good performance.
“Particularly of note was the growth of nonstore retail sales, which were up 14.8% from last year’s values (not adjusted),” said Weinswig.
She added that that it was pretty impressive considering nearly everyone was locked in their homes and switching to online spending last April. Some expected a retrenchment of online sales penetration this year, but this, along with the strong growth of e-commerce sales in the first quarter, suggests that penetration is actually likely to rise again this year.
“Growth in clothing and clothing accessory store sales, one of the hardest hit sectors of the pandemic, was 3.5% from 2019 (it was 711.3% from 2020, but that comparison is a bit misleading),” she sayd.
According to Weinswig, that was something of a disappointment from March growth of 8.9% from 2019, but still solid. It just brought the sector back down to reality after that strong month where people seemed to dash out to spend stimulus checks on clothes- the recovery in this sector is going to be slower than those March numbers might have given some people hope for, but it is definitely underway and should continue.
“Finally, it will be interesting to watch going forward how the electronics and appliance sector copes with growing concerns over chip shortages for all of their electronic components,” she said.
“The auto manufacturing industry has already been hit by the shortage, and the high consumer demand for electronics that drove 12.4% growth from 2019 values in this sector (and likely even greater growth in purchases of electronics from retailers that are not classified in this sector) could soon be at odds with a supply shortage.
About the Author
Patrick Burnson, Executive Editor
Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected]