Insights on Changing Consumer Spending
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FIRST REPORT: MAY 27, 2020
While most of the categories we track showed growth patterns similar to prior weeks, the one category that showed notable improvement is the lodging industry, which saw a strong week to week improvement. Even more notable is the change in the Travel Bookings space (largely dominated by online travel companies) which surged into positive territory this week, likely buoyed by a combination of Memorial Day travel, and optimism about the summer travel season.
The Wholesale and Discount category was roughly flat from the prior week, with Discount stores maintaining a healthy growth gap over the other subcategories, growing 49% year-over-year in the week ending May 24. This gap is largely a reflection of the increased economic pressure incurred by a large part of the population who have lost jobs during this pandemic
The Home Supply segment maintained its very strong growth profile, with spending during the week of May 24 growing 55% year over year. For the part of the population who are forced to work from home, but have not experienced reduced hours or pay, discretionary dollars are being directed towards home improvement.
While largely unchanged from the prior week, the gap in spending growth between Walmart and Amazon remained wide, with Amazon growing 93% year over year vs Walmart’s 16% growth.
Spending in the restaurant category is continuing to show slow, but steady improvement. The Fast Food subcategory returned to positive territory, growing 1% year over year in the week of May 24, while other restaurant spending declined 29% in week, better than the 33% decline from the week prior. The impact of some states easing restrictions is clearly showing up in the data.
Spending in the Video Game category maintained a torrid pace in the week ending May 24, growing 95% year-over-year. It’s hard to imagine that this pace can continue once the country starts to open up on a wider basis, but if work from home continues to be an option for the balance of the year, this segment should see above-average growth.
Spending on Airline travel remains highly depressed, reflecting consumers’ hesitancy to travel long-distance or be in close contact with others for extended periods of time. However, there has been a noticeable continued improvement in spending on lodging from the prior week, with spending down 33% year over year in the week of May 24, much better than the down 47% the week before. We will also point to the table above, where spending on vacation rentals surged to a positive 27% growth after being negative the prior week. As many schools have finished for the year (remote learning), consumers appear to be looking to “get away” from their homes after several months of being sheltered in place.
Much like the prior week, spending at Drug Stores and Pharmacies seems to be settling into pre-pandemic levels, with year-over-year growth near 5%.
FIRST REPORT ARCHIVE