The COVID-19 induced worldwide lockdown resulted in the decline of domestic sales and trade of various commodities except essentials across the globe from March to June 2020. However, the markets are bouncing back to the original size including apparel market. The United States, being one of the major consumers of apparels, has witnessed a sharp decline in domestic sales as well as imports of apparel during the year 2020. For more than ten months now, COVID-19 pandemic is an ongoing catastrophe that has an unprecedented impact on world trade and has led to severe losses to the apparel industry. This article is focused on the domestic sales and import scenario of apparel in the United States from the period of January – November 2020.
Apparel Store Sales Scenario in USA:
The first two months of the year 2020 showed a positive increase in domestic sales in USA as compared to the same period last year. From March onwards the spread of the virus started increasing in USA which led to the nationwide lockdown and stores being shut. The period from March 2020 to May 2020 showed an average decline of 69% in the apparel store sales than the same period last year.
From June 2020 onwards the store sales started recovering as the stores started to open and the customers got access to the markets. The period from June 2020 to August 2020 showed an average decline of 27% and from September 2020 to December 2020 showed an average decline of 22% in the apparel store sales than the same period last year.
Though, the sales started to recover after the opening of the stores, the fear of the spread and the surge in the number of cases resisted a large fraction of the population to go out and shop due to which the sales remained low as compared to last year. There were signs of recovery in the month of September which showed the least decline of 12% in the sales in the period January – December 2020. The sales volume as compared to September increased in the month of October and November but the increase in terms of percentage was lower (-14% and -23% respectively) as compared to last year sales.
For the period January – December 2020, the US apparel store sales stood at US$ 130 billion, approximately 32% less than the same period last year. The sales started to recover sharply in June and then again in September after a period of drastic reduction since March.
Apparel Import Scenario in USA:
Since the initial COVID-19 cases detected in January and February; the first step taken to contain the spread of the virus was to shut the international doors. The shutting of the doors led to a complete stoppage of imports and exports of commodities other than the medical equipment and essentials.
The US apparel imports hit the lowest in May 2020 showing a decline of 60% than the same period last year. After May the US apparel imports started to recover. From the period January to November, 2020 apparel imports of US stand at US$ 59 billion, approximately 24% less than the same period last year.
The COVID-19 outbreak also changed the import scenario of the United States which led to the change in share of top apparel suppliers of the United States. China lost a share of approx. 7% in the US apparel imports The share lost by China has mainly been captured by Vietnam, Bangladesh and Cambodia whose share in the US apparel imports increased by 3.7%, 1.2% and 1.2%.
The pandemic led to the contraction of the apparel store sales and import of apparel in the United States. The sales and import numbers will bounce back as the vaccines are being rolled out unless the second strain of COVID do not hit USA which has lead UK and some other European countries to impose lockdown once again. The trade rift was already in place before pandemic between USA and China and now the COVID-19 has compelled every buyer in USA to have China plus One strategy. Countries like Bangladesh, Vietnam and Cambodia are gaining from the situation and have managed to increase their share in the imports of apparel in United States.