Thailand
Thailand: Help Arriving None Too Soon for Retailers
The Covid-19 crisis has caught back up with retailers again, setting the stage for a hard start to winter. But help may be on the way.
The Commerce Department on Wednesday reported that retail sales in November fell a seasonally adjusted 1.1% from the prior month, and adding to the insult revised its October sales level down as well.
Typical holiday spending categories were among the worst hit, with sales down 3.5% at electronics and appliance stores, 6.8% at clothing and clothing accessories stores, and 7.7% at department stores.
Sales at food services and drinking places fell 4% — an indication that the combination of colder weather crimping outdoor dining and stepped-up Covid-19 worries is hurting the restaurant sector.
The report suggests that the 4.1% annualized growth in fourth-quarter gross domestic product that economists polled by The Wall Street Journal forecast earlier this month may be too high.
Moreover, because it also implies that the level of spending may be lower heading into the first quarter than many economists supposed, the average level of GDP in the first quarter may be lower relative to the fourth quarter than they forecast.
As a result, their projection of 1.9% GDP growth in the first quarter also could be too high, with risk of an outright contraction that would send the economy into a double-dip recession.
Part of what makes the news disconcerting is that it comes during the holiday shopping season, which many small retailers in particular depend on. Fewer of them may be able to survive the winter, with negative repercussions for everything from commercial lending to the job market’s ability to recover.
Another worry is that apart from restaurants, the report reflects weakness in the goods sector, which is what has been driving the recovery since spring.
As of October, consumer spending on goods was still 7.8% higher than in February, according to the Commerce Department, while spending in the far larger services sector was down 5.8%.
One reason retail sales fell last month may be that a lot of consumption was brought forward, as the pandemic since March has shifted demand to goods such as kitchen equipment and home entertainment, combined with the spring’s stimulus checks and even preholiday discount events from Amazon.com and other big retailers.
As a result, demand for goods could now be petering out, while demand for services will only become more depressed in the near term as a result of the rise in Covid-19 cases.
The bright spot for retailers on Wednesday didn’t come from the retail sales report, but from Washington, where Democratic and Republican lawmakers appeared to be closing in on a roughly $900 billion relief deal that could include another round of stimulus checks and further support for small businesses.
None of that money would arrive soon enough to salvage the holiday season for retailers — they would probably be far better off if a deal were struck earlier. But it should make the rest of their winter a little less dark, providing them with a bridge to the spring when, hopefully, the pandemic’s grip on the economy will be far looser than it is now.
Source: https://www.bangkokpost.com/business/2037303/help-arriving-none-too-soon-for-retailers