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Home > Consumer Products > Retail sales rose 7.5% in June as economies reopened

Retail sales rose 7.5% in June as economies reopened

Jul. 16, 2020 by Christopher Shaker

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June retail sales were strong for a second straight month, fueled by the reopening of economies across the country and the continuation of pent-up demand from lockdowns earlier in the year.

Overall retail sales rose by 7.5% in June, which followed May’s record 18.2% gain, the Commerce Department reported on Thursday. June’s gains were heavily weighted toward household items like clothing, furniture and electronics.

At the macro level, consumption is still going to be a significant drag on gross domestic product in the second quarter, but retailers are keeping their focus on the ever-changing market.

Across the entire ecosystem, retailers are hoping that the May and June results are the start of a sustained recovery and that the trend will continue. The question is how long will this last, and can it continue?

Source: Opportunity Insights

With coronavirus cases setting records every day in certain parts of the country, states have begun re-imposing restrictions on businesses like closing bars. But even more important than the potential re-imposition of these restrictions is consumer sentiment.

A good proxy for how consumers are feeling are restaurant bookings. As the nation’s economy began to reopen in the spring, restaurant bookings had a small, but noticeable, increase.

In recent weeks, though, that trend has slowed. The most likely scenario between now and the availability of a vaccine is that retail sales, and overall consumer spending, will likely see a bit of a rollercoaster ride.

The takeaway

Middle-market retailers that have had a small recovery in recent months should be right-sizing their business for the next time the rollercoaster dips.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

 

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Filed Under: Consumer Products, Coronavirus Tagged With: coronavirus, Covid-19, retail sales

About Christopher Shaker

@ChrisShakerCP

Chris Shaker is a partner in RSM’s Boston office. He serves as a member of both the firm’s national consumer products and retail teams. In January 2018, Chris was selected as a senior analyst in RSM’s cutting-edge Industry Eminence Program to focus on trends impacting the consumer sector.

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