The FIRST Report is a series of weekly reports that will shed light on the impact of the COVID-19 epidemic on the consumer economy in the US. We plan to look at three super categories of the consumer economy: Retail, Entertainment and Travel. Focusing on both sectors and individual merchants, we will provide insight into how consumers are being impacted and how they are reacting in this unprecedented time. Our intent is to help businesses, governments, and economists have a current, accurate view of the economy during the COVID-19 pandemic so that they can make informed and timely decisions.
The tailwind of consumer spending appears to be waning in the wake of no further stimulus or enhanced unemployment insurance, with spending declining 9% year over year, the steepest decline we’ve seen since August. The Entertainment segment was flat week to week, the strongest of the major segments we tracked, but only because of the expected rebound in Video Game spend. The deceleration in spend is a trend we will continue to track as we head into the holiday season.
The Retail segment grew 22% year over year in the week ending Nov. 1, down from 26% the week prior. Every subcategory except for Wholesale Clubs was down from prior week levels. Amazon dipped below the 50% growth level for the first time since the before the pandemic but maintained a significant growth advantage over its top retail competitor Walmart.
The Entertainment segment declined 17% year over year, flat with the growth level seen in the prior week. The spending trend in the Restaurant category has been in a slight decline since its most recent peak the week of Oct. 4, with the same trend evident in the Fast Food subcategory. Spending in Video Games rebounded from prior week levels as expected, growing 32% year over year.
Spending in the Travel segment declined 47% year over year, down from the 38% decline the prior week. The biggest week to week drop was in the Air Travel category, which declined 54% year over year, down sharply from a 36% decline the prior week. We will be watching to see if this is a one-week anomaly, as the Air Travel category had been on a slow and steady improving trend since July. Spending in the Lodging category declined 21% year over year, its worst performance since July.
