National Retail Federation
Jack Kleinhenz, Ph.D., CBE, Chief Economist
No single indicator can serve as a reliable estimator of current economic conditions or a predictor of economic behavior. In many ways the consumer is the U.S. economy and retail sales are the primary source for tracking the likely path for consumer spending on goods. But we also concentrate on labor market data and closely follow data on jobs, unemployment and compensation. Our hope is that the latest round of stimulus will provide the necessary and critical relief needed to support struggling families and small businesses.
In the aggregate retail sales have seen a V-shaped recovery, growing both month-over-month and year-over-year each month since June. Retail sales were up 6.6 percent over 2019 levels for the first 11 months, but the growth was uneven and there was not broad-based growth across retailers. As a result of store shutdowns and stay-at-home orders last spring, not all retailers and categories have rebounded as quickly, including small and mid-sized retailers. (We exclude motor vehicles, gasoline and food services in our calculations.)
Pre-pandemic, the retail industry contributed $3.9 trillion to annual GDP and supported 52 million — or one in four — private-sector jobs.
Looking forward, the pace of the economic recovery is expected to pick up after the winter months and into mid-year of 2021. We forecast above-trend growth for the retail trade industry. The outlook for consumer spending depends on the health risks from COVID-19. The availability of vaccines is very encouraging and hopefully we will see a sharp fall in infections. With the vaccine rollout and additional stimulus dollars, many households will begin spending on travel and vacations this summer.
The timing of the vaccine and its availability in the first quarter couldn’t be better. The first quarter has shown to be a soft spot for retail sales and especially during an economic recovery. Economic uncertainty is very prevalent and at near record levels. This puts a crimp in economic activity as businesses avoid or pause in making investments and consumers delay spending. We don’t expect economic activity to return to pre-pandemic levels until late 2021. However, employment will not recover in tandem with GDP and won’t return until well into 2022 and possibly 2023.
This is a reason why stimulus is needed to help speed up employment sooner. It is likely we will see a reacceleration of GDP and jobs moving into 2021 and further leaning into a meaningful economic recovery. In such a scenario, consumer spending may rapidly grow in 2021. The coronavirus crisis forced many retailers to transform their digital capabilities and ecommerce offerings to meet consumer needs. Spending an extended period of time at home has encouraged more consumers to embrace these offerings and accelerated their adoption.
National Association of Chain Drug Stores
Steven C. Anderson, FASAE, CAE, IOM, President and Chief Executive Officer
The retail pharmacy industry’s robust outlook emanates from its truly essential role in meeting the needs of individuals, communities and the nation throughout the pandemic. In April 2020, NACDS launched a national public service message pledging that national and regional pharmacies and their heroic teams in the traditional drug, supermarket and mass retail formats would be there yet again with “lights on, doors open” to help America persevere. That message continues to ring true, and pharmacies are only enhancing their ability to help meet the health and wellness needs of Americans and to meet and exceed consumers’ expectations for products and for the shopping experience.
To understand the positive trajectory of retail pharmacies is to understand the array of services that they offer, and that are even better understood today as a result of their crucial role in pandemic response. There is a pharmacy within five miles of 90 percent of Americans, and the trust and professionalism of pharmacy teams has been recognized and mobilized by the federal and state governments.
Some retail pharmacy chains report an acceleration in technology-empowered programs by as much as three years.
Since the beginning of the pandemic, pharmacies have helped to relieve the burdens on a stretched healthcare delivery system by being there for patients, helping patients to manage chronic conditions when access to other healthcare professionals was made difficult by the pandemic. Through specific actions under the federal Public Readiness and Emergency Preparedness (PREP) Act, the government has paved the way for enhanced roles for pharmacists and other pharmacy team members in COVID-19 testing and in providing vaccinations for flu, COVID-19 and other illnesses. Indeed, pharmacies have answered the call in ramping up COVID-19 testing and in helping to prevent a “twindemic” of flu and COVID-19. Now, 2021 will be an extraordinary year with pharmacies central to an historic COVID-19 vaccination initiative. By conservative estimates, pharmacies can deliver at least 100 million vaccinations per month. Of critical importance, pharmacies are ideally positioned to help reach those in rural and urban settings alike who are underserved and who have been subjected to healthcare disparities.
The pandemic also has spurred innovations throughout the store that will further enhance the consumer focus and competitiveness of retail stores with pharmacies. The pandemic has accelerated NACDS members’ advancement in areas such as technology and meeting and exceeding consumers’ expectations for delivery and pickup options – including contactless offerings. Some retail pharmacy chains report an acceleration in technology-empowered programs by as much as three years. As a result, retail stores with pharmacies can emerge from the COVID-19 pandemic among the most dynamic segments of the economy.
To ensure pharmacies are leveraged completely to meet our society’s needs now and into the future, NACDS will continue to advocate for modernized and sustained government policies that remove unnecessary barriers. The level of preparedness that has been achieved in public policy should not be rolled back.
Direct Selling Association
Ben Gamse, Research Director
As COVID-19 caused the US economy to plunge into a recession in early 2020, direct selling has re-emerged as a remarkably resilient retail channel. According to DSA’s 2020 Growth & Outlook Study, there was $35.2 billion in retail sales in the US in 2019. Additionally, there were 6.8 million direct sellers and more than 36.9 million customers.
More recent DSA research including monthly “QuickPulse” surveys and quarterly KPI surveys, designed to track the impact of COVID-19 on the direct selling channel in the US, provide evidence that direct selling is experiencing significant growth during the pandemic. We’ve seen strong growth in Q2 and Q3, 2020 survey results, and if this continues at the same pace once we get the Q4 results, we could comfortably exceed our 2-5% industry sales growth forecast for 2020.
We’ve seen strong growth in Q2 and Q3 survey results, and if this continues at the same pace in Q4, we could comfortably exceed our 2-5% ($35.9-37.0 billion) industry sales growth forecast for 2020.
With the accelerated adoption of ecommerce technology and a robust global supply chain, direct selling has provided consumers with a reliable way of getting in-demand products during the shuttering of brick & mortar and global supply chain challenges related to the pandemic. Additionally, direct selling is providing earning opportunities to millions of Americans seeking supplemental income as unemployment and underemployment rates are at the highest rate since the Great Depression.
Some of the most successful direct selling companies in recent months have embraced a digital transformation of their business. The pandemic has led to direct selling companies complementing the person-to-person nature of direct selling (i.e. personal touch and personalized service) with the acceleration of digital trends such as ecommerce/social selling/digital parties. Everything from parties to conferences to training has gone online.