E-commerce Soars, Restaurants Suffer As Virus Hits 2020 US Retail Sales

The coronavirus pandemic upended shopping habits in the United States in 2020, government data showed Friday, pushing customers towards online outlets but keeping them away from restaurants and electronics stores.

The Commerce Department said US retail sales in the final month of 2020 were up only 2.9 percent from last year, weaker than the 5.8 percent growth seen from December 2018 as stores across the world's largest economy struggled with its massive Covid-19 outbreak.

Month-on-month sales also fell by a worse-than-expected 0.7 percent in December and November's data was revised downwards as states again tightened restrictions on businesses as infections surged.

"Sales were much weaker than expected in December and declined for a third straight month. Overall, spending is coming under pressure from restrictions that are resulting in job and income loss," Rubeela Farooqi of High Frequency Economics said in an analysis.

Excluding the volatile auto sector, retail sales declined 1.4 percent from November, and even for nonstore retailers like e-commerce sites, which saw huge growth in 2020, sales dipped 5.8 percent.

The report caps a year that saw massive upheavals for businesses, with some prospering but others slumping under the weight of the coronavirus.

Nonstore retailers saw sales rise 19.2 percent in December from the end of 2019 and building materials and gardening equipment were up 17.0 percent.

Grocery stores gained 8.9 percent last year as more people cooked at home and occasionally stockpiled, while sporting goods, hobby, book and musical instrument stores saw sales jump 15.2 percent.

Many other types of retailer suffered as the arrival of Covid-19 made shopping trips potentially perilous.

Clothing and accessories stores were down 16 percent from December 2019, electronics stores lost 16.6 percent and food and drink outlets, like the eateries which were among the first businesses shuttered when the virus arrived, plunged 21.2 percent.

The virus also sunk oil prices, pushing gasoline station sales down 12.2 percent in 2020.

Even with vaccines being rolled out and consumers receiving another round of stimulus checks from the government, Ian Shepherdson of Pantheon Macroeconomics predicted retail sales weren't set for a rebound until the virus is controlled.

"We expect consumers' spending to struggle until falling Covid cases allow restrictions to be eased," he said.