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SACRAMENTO, Calif. (KTXL) — Last month, the novel coronavirus delivered a record dip in US retail sales.

At malls and shopping centers across Sacramento, store after store is closed and parking lots are empty. It’s a similar scene across the country and the globe as the COVID-19 pandemic forces many “non-essential” businesses to shut their doors.

“So, it was expected,” said Sacramento State professor of finance Sanjay Varshney.

That’s why Varshney said it is no surprise that the Department of Commerce retail sales numbers released on Wednesday were way down.

“People were expecting the worst and those numbers look pretty bleak,” Varshney told FOX40.

This week, the U.S. Department of Commerce said retail sales plunged 8.7% in March, which is the biggest drop since the government started tracking that number in 1992.

“This is probably the worst number we have seen since the Great Depression era,” Varshney explained.

Professor Varshney said some businesses, like grocery stores and online retailers, are actually benefiting from the pandemic.

But even before it, many brick-and-mortar retail stores were not doing well.

“You look at J. C. Penney, you look at Kohl’s, you look at Macy’s, they were all basically hurting from the competition coming in from online sales,” Varshney said.

He said he believes many retail chains will not survive.

“You will see mergers and acquisitions,” he said. “You will see a lot of consolidation amongst the companies.”

But the drop will not just hurt the retail industry. State and local governments rely on sales taxes when balancing their budgets.

“It is going to be a major shock and, in many ways, the shock is going to be worse than what we saw in 2008 to 2009,” Varshney said.

According to California’s 2020 to 2021 governor’s budget, sales and use tax make up more than 18% of the overall general fund revenues.

In January, state sales tax was projected to bring in $28,243,000 to California’s budget. But according to the state Department of Finance, that number will likely drop in a revised budget the governor is set to release in May.

Professor Varshney said it is not just the state that will suffer.

“County and municipal governments are going to take a hit,” he said. “Because of the humanitarian crisis, they have to expand their services in many cases and actually spend money on providing those services to their citizens, which is costing them a lot more. And they’re bringing in less, which means they’re going to have a shortfall.”

As a result of the tax filing deadline being postponed, tax revenues coming into the state, county and city governments are already likely going to be delayed.