SBE - Small Business & Entrepreneurship Council

09/16/2020 | Press release | Distributed by Public on 09/16/2020 16:32

Retail Sales Continue to Recover, E-Commerce Sustains Lofty Levels

By SBE Council at 16 September, 2020, 12:58 pm

by Raymond J. Keating-

The latest report on retail sales from the U.S. Census Bureau pointed to the consumers climbing out of the hole created by the pandemic and related shutdowns, as well as e-commerce retailers largely sustaining recent increases in sales.

Census reported that sales for retail and food services in August grew by 0.6 percent. That's a slowdown from recent months, but still a solid gain, at least from a historical perspective.

Retail sales have experienced wild swings over the past six-plus months:

● March sales plunged by 8.2 percent, only to see an even larger 14.7 percent decline in April.

● May's bounce back registered 18.3 percent, followed by 8.6 percent in June.

● July came in at +0.9 percent followed by, again, +0.6 percent in August.

Source: Federal Reserve Bank of St. Louis, FRED

In terms of sales in particular industries, one item that jumps out of the report is that nonstore retail sales - i.e., including e-commerce - actually experienced no growth in August. That might appear surprising given how many people are still at home - working or otherwise. But it should be noted that this is a one-month point. As noted in the following two charts, nonstore retail sales experienced large jumps in each month as the pandemic hit, and while there has been a leveling off (or tiny decline) in the past three months, total sales have remained at lofty levels.

Source: Federal Reserve Bank of St. Louis, FRED

Source: Federal Reserve Bank of St. Louis, FRED

Of course, it also should be noted that nonstore retailing is overwhelmingly about small businesses. When considering both employer firms and nonemployers, 99.1 percent of nonstore retailers have fewer than 10 employees (2017 Census data).

Almost everyone is struggling to varying degrees, but e-commerce retailing has experienced a significant surge. That's been a small business good news story in an otherwise grim economy.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.