US e-commerce sales during the pandemic increased by more than 30%, according to quarterly figures from the US Department of Commerce.
The increase in US e-commerce sales took place between the first and second quarter of 2020, suggesting that the pandemic has caused people to spend more online.
Data showed that consumers spent $211.5 billion online during the second quarter, a 31.8% increase from the previous quarter. This is an important step up from the first quarter, which reported US e-commerce sales of $160.3 billion, a 2/4% increase from the fourth quarter of 2019. E-commerce now makes up for 16.1% of all US sales, up from 11.8% in the first quarter.
Data revealed that the coronavirus pandemic has triggered a shift to e-commerce in the US.
In March and April, several consumers bought essential goods from online retailers, and some of these items are paper towels and hand sanitizer. There has been an increase in purchases for things like electronics and office supplies. Online grocery orders also rose as many consumers chose to avoid supermarkets.
The July Census data revealed that consumers have been comfortable with online shopping even as many businesses have resumed their operations. Total retail sales further dropped in the second quarter, dropping by 3.9% from the first quarter of 2020, when total retail sales fell by 1.3% from the fourth quarter of 2019, according to data from the Census Bureau.
Major retailers like Amazon, Walmart and Target have reported positive sales due to the quick shift to e-commerce during the pandemic. Both Amazon and Walmart revealed massive increases in e-commerce sales in the last quarter, while Target reported a spike in digital sales in the first quarter.
Middle East
The increase in e-commerce sales does not only happen in the US. Online grocery sales in Middle East increased during the coronavirus pandemic, and the trend may stay, according to a retail executive.
Supermarket operator Carrefour’s online orders rose by 917% in Saudi Arabia from January to June this year. Meanwhile, the United Arab Emirates and Egypt recorded increases of 257% and 747% respectively over the same period.
“Online has been … soaring since the start of Covid, although we have been growing before,” said Alain Bejjani, CEO of retail giant Majid Al Futtaim.
“There’s been a fantastic surge across the region,” he told CNBC’s “Capital Connection” on Tuesday.
Bejjani said the trend may continue beyond the pandemic, mentioning a survey held by consulting company McKinsey.
UK retail sales
Retail sales volumes in UK in May increased by a record 12.0% after a historic 18.0% slump in April.
Consumer confidence data for June showed strength since the lockdown started but continued to be weak, according to a separate survey.
According to Bank of England Governor Andrew Bailey, the economy is weakening in the first half of 2020 than the BoE worried about last month. However, there was no guarantee of a strong recovery and unemployment may still worsen.
“May’s recovery in retail sales should not be interpreted as a sign that the economy is embarking on a healthy V-shaped recovery from Covid-19,” Samuel Tombs, an economist at Pantheon Macroeconomics, said.
He noted that household incomes would be strained when a government program that caters to 9 million jobs is wound up in October, before some sectors could return to normal.
