2. End of Retail: Update
sources: HiddenLevers,
In-store Sales Rebound Prolonged UnemploymentLegacy Retailers Die
- June 2020 YOY Retail Sales grew
1.1% after 3 months of contraction
-CARES Act UI $ getting spent
-Intâl retail may help US companies
-Weak Retailers going bankrupt
from COVID.
-JCP unprofitable since 2010
-2% of small businesses have filed
bankruptcy so far. Over 100k firms
-More bankruptcies this year than
ever, even 2008 crisis
-25k store closing expected 2020,
double 2019 levels
-Current Republican plan reduces
UI from $600->$200/week.
-This + prolonged unemployment
kills spending and recovery
-95% percent recovery of pre-Covid
levels would be deep recession
+1.1%
YOY
3. End of Retail: Overall Spending Trends
sources: HiddenLevers, McKinsey
Total Spending still below January levels Retail recovered more than T&E spend
4. End of Retail: Detailed Category Trends
sources: HiddenLevers, Statista
Consumer Intended Spending for 2-week period from June 21.
Big ticket items and non-essentials taking biggest hits.
5. End of Retail: Political Risk
sources: HiddenLevers
-Current Republican plan reduces
UI from $600->$200/week.
-This plus prolonged
unemployment kills spending or
recovery
-Without UI, a large chunk of
spenders disappears
6. End of Retail: Overall GDP Impact
Retail Sales GDP could
take up to 2 years to
return to pre-Covid levels
sources: HiddenLevers, McKinsey
7. End of Retail: Update
sources: HiddenLevers
Retail Rebound
BASELINE
GOOD
S&P 500
2600
-20%
S&P 500
3600
+10%
S&P 500
3300
+2%Legacy Retailers Die
UGLY
Prolonged
Unemployment
REDUCED UI BENEFITS +
LONG UNEMPLOYMENT =
NO SPENDERS
JUNE 2020 +1.1% RETAIL
SALES REBOUND
CONTINUES
RETAILER BANKRUPTCIES
CONTINUE RECORD PACE.
ONLINE DOMINATES
Retail Sales
-3%
Retail Sales
+3.5%
Retail Sales
+2%