WSL Future of Health Event

Post-pandemic boom anticipated

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The COVID-19 pandemic has been bad for America and bad for many American businesses, but the end finally appears to be in sight. President Biden has said all adults will be eligible for vaccination no later than May 1, and this month he signed a $1.9 billion COVID-19 relief bill that should give the economy a boost.

The upshot is that after a challenging 2020, retailers are expected to have a very good year in 2021.

The National Retail Federation forecast last month that retail sales this year — excluding automobile dealers, gasoline stations and restaurants — will grow between 6.5% and 8.2% over 2020, topping out at between $4.33 trillion and $4.4 trillion.

“Despite the continuing health and economic challenges COVID-19 presents, we are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” NRF president and chief executive officer Matthew Shay said in announcing the forecast.

The retail industry as a whole actually had a good year in 2020 as well, at least when it comes to revenues, despite the pandemic. Retail sales in 2020 grew 6.7% over 2019 to $4.06 trillion, nearly twice NRF’s forecast of at least 3.5% growth. The 2020 figure is also significantly higher than 2019’s 3.9% retail sales growth.

For retailers the real challenges in the pandemic involved finding ways to keep their customers and employees safe, keeping their shelves full, coping with the surge in online business, and serving on the front lines of COVID-19 testing and vaccination efforts. Shay argues that the industry has performed well on those metrics.

“From the outset of the pandemic, retailers have gone above and beyond even the most conservative safety guidelines to protect and serve their associates and consumers alike. Retailers are increasingly engaged in working with federal, state and local health officials to distribute and administer the vaccine. This partnership has been key to our economic health throughout the pandemic and will continue this year.”

One reason retailers have done well during the pandemic is that many consumers had money to spend and were less able to spend it on travel, restaurants and other services. Post-pandemic, some of that spending should shift back to services, which normally account for about 70% of consumer spending. Overall retail spending should still rise with the rebounding economy, but retailers will face new challenges as consumer buying patterns shift.


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