As retail sales pick up again, National Retail Federation CEO Matthew Shay said he wants to make sure small and mid-sized stores and restaurants can make a comeback, too.

“They get hit harder and they get hit first and so we need to bring them back quickly,” he said on CNBC’s “Squawk Box.”

Retail sales jumped by 17.7% in May, the Commerce Department said Tuesday morning. That includes customers’ online purchases, as well as those at brick-and-mortar restaurants, bars and stores. It’s the sharpest one-month jump on record.

Excluding food services, May retail sales were only down by 1.4% compared to a year ago, according to an analysis by Moody’s Investors Service. 

Moody’s vice president Mickey Chadha said that’s “an astonishing feat considering most of the non-essential retailers were still shut for a good part of May.”

During the pandemic, stay-at-home orders forced many stores and restaurants to temporarily shut their doors to slow the spread of the coronavirus. Grocery stores, pharmacies and some big-box retailers were deemed essential retailers and allowed to stay open. The rest had to switch to nearly all online operations or give up all of their sales. 

In recent weeks, shopping malls have reopened and more restaurants have offered curbside pickup or allowed limited dining — but it’s hard to predict Americans’ shopping habits as millions are still unemployed, furloughed or living on tighter budgets because of pay cuts. 

Shay said he’s encouraged to see customers spending again as stay-at-home orders lift. After sheltering in place during the coronavirus pandemic, he said “there was significant pent-up demand” among Americans, including many who had more money in their pockets because of the government stimulus checks.

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He said that federal relief and unemployment benefits “provided a big jolt that we needed.”

However, he acknowledged that the rebound is uneven. Big retailers, such as Walmart, Lowe’s and BJ’s Wholesale Club, have had strong sales — and they were among the essential retailers that didn’t have to shut their doors during the pandemic.

Smaller businesses, however, are still struggling, he said. 

“The big question will be what happens to those small, independent, those mid-sized companies,” he said. “Can we get the rest of the economy moving quickly enough that we can bring the small businesses along?”

The May numbers are a promising uptick after retail sales tumbled by a record 16.4% in April, according to a government report. The steepest drop was at clothing stores, which declined by 78.8%. Other hard-hit categories were electronics and appliances, which fell by 60.6%,  furniture and home furnishing, which dropped by 58.7%, and sporting goods, which declined by 38%.

Coronavirus cases are rising across nearly half of the states and hospitalizations are up, too, as businesses reopen, some people return to work and summer activities like trips to the pool or day camps resume.

Shay said independent and smaller businesses need to make up for sales they lost, if they’re going to survive. He said essential retailers who stayed open in the early weeks of the pandemic have shared best practices and shown that “the mere act of being open is not unsafe.”

“Keeping the economy open, I think, is going to be the best relief for these small businesses,” he said. “We can’t go into lockdown mode again.”

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Via CNBC