MOLINE, Ill. — On Wednesday, the US Department of Commerce reported that monthly retail sales in November declined by 1.1% from October, ending 6 consecutive months of sales growth for the retail industry.
Financial expert Mark Grywacheski says November’s Retail Sales Report did cause a bit of angst on Wall Street. November’s total of $546.5B in sales was well below what Wall Street was expecting. Monthly retail sales fell by 1.1 percent from October, and October’s original gain of 0.3 percent was revised lowed to a 0.1 percent decline.
But Mark says it's important to put this report in context.
"Monthly retail sales in November are 3.6 percent higher than February," he says. "This means that retail sales are still higher than they were before the COVID-19 pandemic hit in March/April."
Mark says much of this is tied to a surge in COVID cases across the U.S.He says we're also starting to see a similar impact on the labor market and other facets of the economy.
"But this was to be expected," he says. "As we’ve seen over the past eight to nine months, any time the number of COVID-19 cases starts to escalate, so do government restrictions on businesses and consumers’ hesitancy to frequent stores and large crowds."
Now, Mark says this recent weakness in the economic data has certainly raised some alarm bells. But there haven’t been any panic or major sell-off in the stock market because Wall Street believes this recent surge in cases is most likely temporary.
"We do continue to see this disconnect between the Big-Box retailers and the big online retailers like Amazon vs. the smaller stores and businesses," he says. "In many states, these smaller stores face tighter government restrictions on customer capacity."
But Mark adds the main factor is the continuing shift towards online shopping, which inherently benefits Amazon and these big stores that have the resources and technology to develop these state-of-the-art online shopping platforms. Smaller businesses tend to thrive by giving their customers a reason to visit their physical store with a higher level of service and a unique shopping experience.