Insights on Changing Consumer Spending
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FIRST REPORT: JULY 22, 2020
Spending levels look largely the same for the week of July 19, with segments that have been strong remaining so, and segments that have been weak continuing to be weak. Notably, we seem to have reached a plateau on travel spending and would not expect to see much improvement in this sector without improvement in COVID-19 infection rates. There was a large plunge in spending growth at Amazon, but only because its Prime Day event, which took place this week last year, was postponed this year till later in the year, making for apples to oranges year over year comparison.
Overall retail spending growth in the categories we track was largely unchanged from the prior week. In the Discount category, growth in spending at Wholesale Clubs improved from the prior week, growing 37% year-over-year during the week ending July 19. Discount Store spending growth was 36% year-over-year, same as the prior week. Spending in the Home Supply sector saw a modest increase from the prior week, growing 35% year-over-year.
While spending growth at Walmart was largely unchanged from the prior week at 5% year-over-year, spending growth at Amazon fell sharply on a year-over-year basis. This, however, is a function of the postponement of Prime Day this year to sometime in the fall season. Prime Day for Amazon in 2019 was on July 15 and 16 (a 36-hour promotion), so the lack of associated Prime Day volume this year made the year-over-year comparison tough. We expect that next week Amazon will return to growth rates in the 60% to 80% range.
Spending in the overall Restaurant category decreased slightly from the prior week, falling 10% year-over-year, while spending growth at Fast Food restaurants ticked up to 6% year-over-year. Spending growth in the Video Game space maintained its torrid pace, growing 65% year-over-year during the week.
Spending in the Travel segment remains very weak, with the overall segment falling 52% year-over-year in the week ending July 19. Air Travel (down 75%) continues to perform worse than Lodging (down 21%), with both categories basically unchanged from the prior week. Consumers are reluctant to travel more in the face of rising COVID-19 cases.
FIRST REPORT ARCHIVE