The Azucena Take: March Retail Sales are a Sign of Things to Come

From time to time, I have mentioned how retail is not dead and how it has thrived every time a new stimulus has passed. It has happened again following the passing of the last stimulus package but this time we could see the growth to be stronger and last longer.

According to the latest data from Marcus & Millichap, core retail sales were up by 38% in March 2021 and are expected to grow in April. This might look like a repeat of the previous stimulus packages which saw major gains followed by a loss. That will be unlikely as the gains from the third stimulus are expected to be long term because of several factors.

The third stimulus was created with the goal of sustaining the economy while setting the groundwork for a post-pandemic boom. Its success is tied to the efforts of vaccinating the public along with the states scaling back on economic and public restrictions. With these factors combined, the current surge in retail sales is a sign that life is returning to normal.

The numbers alone do share good news, but it gets better when you break them down. For example, the restaurant industry (which took a major hit) has seen its sales and employment numbers jump in March 2021. Before the pandemic, the restaurant industry had surpassed the grocery industry regarding sales. While groceries are still doing better, the difference is only by 2%.

For owners of retail property, these numbers demonstrate that the economy is recovering. Those who held on to their property and worked to keep their tenants are going to see a massive return on their investments. They have also better positioned themselves to reap the rewards of the post-pandemic economy that is happening.