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Retail Sales Decline for Third Straight Month — But Clothing and Accessories Stores See Uptick

Retail sales were down for three months in a row to close out 2020 — a year marred by the COVID-19 pandemic, which decimated hundreds of thousands of businesses across the country as consumers pulled back on discretionary purchases and significantly reduced their visits to brick-and-mortar stores. Still, clothing and accessories stores were a bright spot compared with other categories.

According to the Commerce Department, retail sales in December fell 0.7% to $540.9 billion. Data for November showed a downwardly revised 1.4% drop, instead of the initially reported 1.1% decrease.

Last month, holiday shoppers largely avoided stores amid a surge in novel coronavirus infections. The scenes that often play out during the weekend leading up to Christmas — think long lines outside stores and crowded parking lots — did not materialize. Many Americans turned to e-commerce to do their shopping, whether delivered to their doors or picked up curbside.

The earlier-than-usual holiday shopping season was also a likely factor for the decline: The U.S. Census Bureau reported that sales at electronics and appliances stores as well as online retailers — two channels that are heavily favored for gifting — slumped a respective 4.9% and 5.8%. Spending that ordinarily occurs in December was stretched to as early as October, when Amazon hosted its annual Prime Day extravaganza, leading other retailers to follow suit with their own promotions and markdowns.

In addition, sales at department stores plunged 3.8%; big-box stores tumbled 1.2%; and sporting goods plus other hobby stores sank 0.8%. However, sales at clothing and accessories stores rose 2.4% and miscellaneous store retailers saw a 1.7% gain.

What could perhaps offer a boost to spending at the start of 2021 is additional stimulus: Last month, Congress and the White House passed a $900 billion COVID-19 relief measure that provided $600 in direct payments to eligible Americans as well as extended a $300-per-week unemployment insurance supplement through mid-March. (Both of those benefits began rolling out early this month.) And, just yesterday, President-elect Joe Biden — who will be sworn into office on Jan. 20 — unveiled a sweeping $1.9 trillion plan that would include another $1,400 in checks and $400 in weekly jobless aid through September.

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