US retail sales projected to drop by over 10% in 2020
The US retail sector could take years to recover from the impact of the COVID-19 pandemic, and the hit could be worse than that of the Great Recession, according to the latest forecast on US retail sales by eMarketer, which recently said total retail sales will drop by 10.5 per cent this year to $4.894 trillion, steeper than the 8.2 per cent drop in 2009.
Brick-and-mortar sales will weigh down overall retail long term. Brick-and-mortar retail sales will fall 14 per cent to $4.184 trillion in 2020. It will take up to five years for offline sales to return to pre-pandemic levels.
E-commerce is the only bright spot, jumping 18 per cent this year to reach $709.78 billion as Americans rely on Amazon and other online retailers for necessities.
These estimates assume that widespread social distancing measures, which have gradually been lifted in May, will continue to ease and economic activity slowly resumes in the third quarter, according to a press release from the company.
However, consumer spending will likely remain dampened throughout the year. Total retail sales won’t rebound to 2019 levels until 2022, and estimates throughout the forecast period will be lower than previously predicted.
For the first time, Walmart will surpass eBay as the No. 2 e-commerce retailer in the United States.