Good news, bad news for local retail | Business

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Although nationally, retail sales in the United States have increased by a modest 3% this holiday season, the local retail sector is forecasting a loss of 15% for the full year, due to Puerto Rico’s months-long lockdown that began in March and continued trade restrictions on the commercial sector.

While many brick-and-mortar stores in Puerto Rico reported increased foot traffic during the holiday season as many shoppers wanted to support local businesses, that wasn’t enough to offset lost retail sales. for the whole year. At the same time, many small retailers lack the ability to do e-commerce.

“In no way does this compare to previous years. The increase in customer base is more of an agglomeration caused by the funnel effect. If the hours are reduced and the operations are suppressed one day, the traffic increases on the other days… There has been a weaker consumption pattern and the gap continues to be lower than double digits”, indicated Iván Báez, president of the Puerto Rico Retail Association.

To date, the retail industry expects to end the year with losses of $2 billion. This means sales in 2020 closed 15% lower than the $32.157 billion recorded at the end of 2019. For the retail industry, the busy Christmas season typically accounts for 30% of their total sales for the year. .

“It was very negative for us. The limitations imposed by the executive orders (due to COVID-19) prevented a breakthrough during the Christmas season, which is usually the most lucrative. The trend is not positive due to Sunday closures, reduced capacity and limitations on opening hours,” Báez said.

The Walmart executive also said that in the week leading up to Christmas Eve, sales of alcoholic beverages increased, followed by toys – which in previous years led sales – and prepared and unprepared meals.

“This year, the sale of alcoholic beverages has increased a lot because [retailers] had three days where businesses could not sell alcohol,” he added.

E-commerce continues to lead the way

According to data from Mastercard SpendingPulse, U.S. holiday retail sales, excluding autos and gasoline, increased 3.0% during this extended holiday season, from 11 October to December 24. Notably, online sales increased by 49.0% compared to 2019, according to preliminary information. . Mastercard SpendingPulse measures overall retail spending trends for all payment types, including cash and checks.

“American consumers have turned the holiday season on its head, redefining ‘home for the holidays’ in a unique way in 2020. They’ve been shopping from home for home, driving record e-commerce growth,” said Steve Sadove, Senior Advisor to Mastercard and former CEO and Chairman of Saks Inc. “And consumers have been shopping earlier than ever. During our extended 75-day holiday shopping season, sales have increased by 3.0%, reflecting the holiday season and the strength of retailers and consumers.

Key findings from Mastercard SpendingPulse underscore the shift to online spending, with e-commerce accounting for 19.7% of overall retail sales, up from 13.4% in 2019. Additionally, consumers continue to spend more time – and spending more money – to their house.

Furniture and home furnishings saw the strongest growth of any industry compared to 2019, up 16.2%, and it grew 31.0% online specifically. Additionally, home improvement grew 14.1%, with e-commerce sales up 79.7%.

Clothing was down 19.1% year-on-year, while electronics and appliances were up 6.0% overall.

Department stores saw an overall sales decline of 10.2% and online sales growth of 3.3%, reinforcing the importance of omnichannel offerings. Buying online, picking up in store and technologies like contactless have been essential for retailers this season.

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