Economy

In Between Stimulus Payments, Retail Sales Decline

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President Biden signed into law a nearly $1.9 trillion relief plan last week, and direct payments of $1,400 per person are already making their way to the bank accounts of low- and middle-income Americans.

The law, known as the American Rescue Plan, also extends $300 weekly federal jobless benefits through Sept. 6 and provides billions of dollars to distribute coronavirus vaccines and relief for schools, states, tribal governments and small businesses struggling during the pandemic.

“Some of that money is bound to flow into retail — it just has to,” Mr. Chadha said.

The major changes in consumer habits during the pandemic have been on display in recent weeks as retailers have reported their holiday and full-year earnings results. (Most retailers end their fiscal year at the close of January to fully capture holiday spending.)

For example, Walmart reported fourth-quarter revenue that hit a record of $151 billion, up 7.3 percent from a year earlier, while Target also reported an increase in the same period, including a surge in digital sales. Consumers have gravitated to the chains in the past year, both in person and online, and increasingly used services like curbside pickup.

But the story was different at Macy’s and Gap, one of the country’s biggest operators of mall stores, which posted sales declines in the fourth quarter and grim annual revenue drops as many consumers stayed away from malls and had fewer reasons to buy new clothes in an isolated environment. Gap, which also owns Old Navy and Banana Republic, pointed to stay-at-home restrictions and store closures as reasons for its tumbles.

Still, Gap had a positive outlook for the back half of this year. “As vaccines roll out and stimulus checks begin, we currently view the second half of 2021 favorably, reflecting a likely return to a more normalized prepandemic level,” Katrina O’Connell, Gap’s chief financial officer, said on an earnings call this month.

Jeff Gennette, Macy’s chief executive, said in an interview this month that the company was looking for “clues on what’s going on with wedding dates, what’s going on with restaurant reservations, what are the signs that communities are starting to open up.” That would help the company determine how consumers were planning “wearing occasions” this year, he said.

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