Retail Sales Declined 1.3%, Driven by Supply Chain Challenges
Washington, DC, June 15, 2021-Advance estimates of U.S. retail and food services sales for May 2021 were $620.2 billion, a decrease of 1.3% from the previous month, but 28.1% above May 2020, according to the Commerce Department. Total sales for the March 2021 through May 2021 period were up 36.2% from the same period a year ago. The March 2021 to April 2021 percent change was revised from virtually unchanged to up 0.9%.
One reason for the decline is the vehicle shortage. Reports the Wall Street Journal, “Vehicles, however, are in short supply as a global computer-chip shortage has left car dealers with a dearth of inventory. As a result, auto sales likely fell last month. ‘If you don’t have products, you’ve got nothing to sell and that means lower revenues,’ said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings.”
The article continues, “Sales at Modern Bungalow, a Denver-based furniture store, have slowed sharply recently after doubling from a year earlier for months after the pandemic hit, co-owner Danielle Sandusky said.
“Newly minted home buyers needed furniture to outfit their spaces, and others who were stuck inside, spent more on home goods in lieu of travel earlier in the pandemic, she added.
“Ms. Sandusky said she expected some amount of pullback as the economy reopened and consumers had more options for spending. Supply-chain bottlenecks have created additional challenges, she added. Many of Modern Bungalow’s suppliers are struggling to quickly deliver furniture to the retailer due to shortages of raw materials including lumber, foam and polywood, a recycled plastic.
“For instance, a custom-made Amish dining set used to be built within 8 to 10 weeks and then shipped to Modern Bungalow within one to two weeks. Now such a piece takes 14 to 16 weeks to build and two to three weeks to ship.
“Upholstered furniture used to arrive in six to eight weeks and now takes up to six months, said Ms. Sandusky. Longer wait times are deterring some customers from proceeding with purchases, she said.
“‘They’re saying, ‘well, if it’s not going to be until October, November anyway, I’ll just wait. I’ll spend my money now on restaurants and travel and whatever and then I’ll see where I am in the fall and order something then,’’ Ms. Sandusky said. She is hopeful that by the winter, ‘we’ll be back at it, and it’ll be normal.’”