Insights on Changing Consumer Spending
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FIRST REPORT: JULY 8, 2020
Spending trends in the Week 15 installment of the FIRST report look very similar to Week 14 in the aggregate. While overall trends were fairly steady in some subcategories (Discount Stores, Home Supply Store, Video Games), the deceleration trends we saw the prior week continued. Restaurant spending was also in retreat, reflecting an increasing hesitancy of consumers to dine out as COVID-19 cases start to re-accelerate in some parts of the country. Travel spending trends also appear to have stalled, with Air Travel, not surprisingly, continuing to see very large year-over-year spending declines.
Spending growth during the week ending July 5 in the broader retail category was flat from the prior week, coming in at 21% year-over-year. Notable in the subcategories was a deceleration in spending at Discount Stores (growing 34%, down from 37% the prior week) and Home Supply Stores (growing 33%, down from 38% the prior week).
Spending growth at Amazon and Walmart was largely unchanged from the prior week, coming in at 62% and 4%, respectively. The gap in growth between the two companies remains large, and this marks the 12th straight week that Amazon grew over 60%.
Spending growth in the broader entertainment category during the week of July 5 dropped a bit from the prior week, falling 28% year-over-year vs 23% drop the prior week. The Restaurant category seems to be in retreat after weeks of improvement, with spending declining 15% year-over-year, while the Fast Food subcategory grew 4% year-over-year. This is consistent with consumers reconsidering dining out and returning a bit to the low contact establishments with take-out and drive thru options. The Video Game category continued to see deceleration, with year-over-year growth hitting 51%, down from 63% the prior week.
Spending in the overall Travel segment remained uninspiring, declining 48% year-over-year. The Air Travel segment worsened in the week, declining 69% vs 63% the prior week, while spending in the Lodging sector declined 19%, slightly worse than the 17% decline it saw last week. It appears that travel restrictions like those put in place by states like New York (which require travelers from COVID-19 hot spots to self-quarantine for 14 days upon arrival) may be having some impact on travel booking.
FIRST REPORT ARCHIVE