\nRecent data\u00a0by Trading Economics found that June retail sales in the US jumped by 17.7 per cent from a month earlier in May, after recovering from a record 14.7 percent fall in April. This marked the biggest rise on record as stores reopened when coronavirus lockdowns was eased across the country.<\/p>\n
The biggest increase was seen in clothing stores, which saw sales rise by 188 per cent. But compared to the same month in 2019, sales fell 6.1 per cent.<\/p>\n
The global retail sector witnessed one of the hardest years for trading in 2019 as consumer spending slowed down and more ethical practices were adopted by shoppers. Yet compared with UK shoppers, US consumers are far more confident when it comes to economic recovery post-pandemic.<\/p>\n
According to\u00a0Michael Schirrmacher, managing director UK at software firm Bloomreach, 36 per cent of Americans are confident that the US economy will bounce back in the first two or three months post-Covid, compared to just 15 per cent of UK consumers.<\/p>\n
\u201cThis disparity in consumer confidence also leads to a disparity in consumer spending,\u201d he said.<\/p>\n
For the US retail sector, more than 7600 stores closed through the year to October, a record for that point in the year, according to Credit Suisse.\u00a0Now with Covid-19 becoming the main accelerator of bankruptcies, retailers have seen yet another year of particularly troubling trading.<\/p>\n
The coronavirus\u2019 economic fallout is fueling Chapter 11 bankruptcy filings \u2013 the US answer to administrations in the UK \u2013 at the fastest pace since 2013. Filings totalled 3427 on June 24, the Financial Times<\/em>\u00a0reported.<\/p>\n Some of the most recent and well-publicised failures in US retail include the downfall of fashion chain J Crew, which filed for bankruptcy protection on May 4. It was the first major US retailer to fall victim to the pandemic.<\/p>\n Meanwhile, Neiman Marcus became the first major department store chain in the US to file for bankruptcy protection on May 7.<\/p>\n Shortly after, 118-year-old department store chain J.C. Penney, which filed for bankruptcy protection in mid-May, announced it would permanently shut some of its 850 locations.<\/p>\n Despite the US retail industry losing credibility amid the pandemic, US giants Walmart, Kroger, and Amazon took the top three spots in a recent ranking by the National Retail Federation, which used data from Kantar Consulting to look at the top 100 biggest retailers in 2020 based on sales.<\/p>\n After a bruising start to the year, US department stores and fashion retailers will seek to bounce back in the second half of 2020 by closing more locations, shrinking their shops or adding more experiences to attract customers and drive footfall.<\/p>\n This year, it was clear that both categories lost ground as consumers continued their steady migration to online retail. While traditional retailers like Macy\u2019s and Gap have invested in e-commerce, it\u2019s uncertain as to whether that will be enough to restore their former stature.<\/p>\n Tamara Charm, senior expert at global consulting firm McKinsey & Company, said one main similarity between the US and the UK is the surge in online shopping.<\/p>\n \u201cConsumers expect to increase their online shopping and digital behaviour post Covid-19 even when brick-and-mortar stores reopen,\u201d she said.<\/p>\n \u201cIn the US and the UK specifically, there has been high online conversion rates before the pandemic, and e-commerce continues to grow across all product categories.\u201d<\/p>\n Schirrmacher agreed and said spending in the US remains \u201crobust\u201d with e-commerce spending up 35 per cent in June compared to last year: \u201cIn the UK, we are actually seeing e-commerce spending start to stagnate a little bit and e-commerce spending was actually down two per cent in June compared to last year.\u201d<\/p>\n The US has historically been a challenging country to conquer in retail due to its size and diversity. Times have changed though, with technology making paving the way for many to enter the US.<\/p>\n The US market is highly saturated with competitive brands and standing out can prove to be a real challenge. Arcadia-owned Topshop managed to break through in 2008, with its website tailored for US audiences, followed weeks later with the launch of a single flagship store in New York.<\/p>\n The retailer also entered into an exclusive partnership with US luxury department store chain Nordstrom in 2012, creating shop-within-a-shop capsules for the brand in 42 stores.<\/p>\n Other British retailers like Boden, Jack Wills and Superdry have all created highly differentiated brand positioning that resonates with US consumers.<\/p>\n These retailers took a different route into the US rather than buying their way into the marketplace. For example, M&S bought Brooks Brothers in 1988 for $750 million. However, the move proved disastrous and Brooks Brothers was soon sold to Retail Brand Alliance for for $225 million.<\/p>\n Boden\u2019s tagline \u201cGreat British Style\u201d and Jack Wills\u2019 site proclaiming the title \u201cFabulously British\u201d arguably capitalises on the American appetite for all things British. However, the US can also be a challenge due to a competitive marketplace and maturity. As Tesco\u2019s recent pullback from the US market has shown, deep pockets are not enough to succeed.<\/p>\n Tesco\u2019s attempt to lure US shoppers with a novel store format after buying the Fresh & Easy chain for \u00a31 billion in 2007 backfired \u2013 it only lasted five years. Tesco said in 2012 that its losses, which were up from \u00a3165 million in the previous year, were down to two things \u2013 the cost of merging two suppliers and an unfavourable exchange rate.<\/p>\n According to Nikki Baird, vice president of retail innovation at retail tech provider Aptos, said Tesco\u2019s Fresh & Easy stores were built on the concept of many smaller-basket trips, and \u201cthat\u2019s just not how grocery consumers shop in the US\u201d.<\/p>\n \u201cThey buy big weekly baskets, with only high-density cities being the exception where they don\u2019t have the storage for weekly or monthly pantry-filling trips,\u201d she explained.<\/p>\n \u201cUS consumers are more spread apart on average, and this drives different behaviours.\u201d<\/p>\n Baird told\u00a0Retail Gazette<\/em>\u00a0that \u201cretailers don\u2019t enter the US lightly, yet history is strewn with previous failures\u201d.<\/p>\n \u201cTesco placed smaller stores close to urban hubs, rather than large stores in out of town locations where consumers were used to,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":" For more than a century, the US has had the world’s largest economy, but in the wake of Covid-19, its dynamic retail sector has faced plenty of uncertainties. ME RetailNews looks at how it’s performing in this current climate.<\/p>\n","protected":false},"author":39,"featured_media":17804,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4140],"tags":[4142,4144],"_links":{"self":[{"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/posts\/17459"}],"collection":[{"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/comments?post=17459"}],"version-history":[{"count":3,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/posts\/17459\/revisions"}],"predecessor-version":[{"id":17805,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/posts\/17459\/revisions\/17805"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/media\/17804"}],"wp:attachment":[{"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/media?parent=17459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/categories?post=17459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.meretailnews.com\/wp-json\/wp\/v2\/tags?post=17459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}