As the second largest retail market in 2019 (behind China), the U.S. is set to experience the steepest slump of all other countries this year (in terms of value) declining more than $200 billion versus 2019, according to figures from GlobalData. Spend is forecast to fall 5.1% with only 10 other major markets to see deeper declines, says GlobalData, a leading data and analytics company.
Emily Salter, Retail Analyst at GlobalData, commented: “The U.S. will perform worse than a number of other countries that have also been significantly affected by COVID-19, including the U.K. and Germany, due to the huge number of job losses caused by the virus; but it will fare better than Spain, France and Italy as the U.S. has not enforced a full lockdown. The US retail market will perform slightly worse than neighbour Canada (-4.5%) which has also not entered a full lockdown.”
Although restrictions are started to lift in certain states, GlobalData envisages that many stores will remain closed and footfall will be severely limited through to the end of May. Non-food spend will start to recover in June but normal spending patterns will not return until at least October, and among many consumers this will not be the case because of the high unemployment rate caused by the economic restrictions currently in place.
Salter continues: “The 5.1% drop in the market in 2020 hides contrasting fates of different sectors, with sales of food and grocery and health products increasing as consumers stockpile goods and prioritize good hygiene, as well as the stay at home orders leading to a shift to grocery spend from food on the go, restaurants and cafes. Non-essential sectors will be hit the hardest in 2020 as consumer confidence falls, with fashion forecast to suffer significantly as consumers have no events or holidays to purchase new clothes for, and growth in the demand for loungewear cannot match this.”
