COVID-19 has affected the way consumers are spending. Debit and credit card spending has created new trends in spending categories that have not been largely spent before COVID-19.

1010Data has gathered information based upon 5 million U.S consumers, and have broken down each spending into 18 different categories. Certain categories have seen a spike in the market, however, some have plummeted.

Wishing you best and stay safe,

Michael

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How U.S. Consumers are Spending Differently During COVID-19

In 2019, nearly 70% of U.S. GDP was driven by personal consumption.

However, in the first quarter of 2020, the COVID-19 pandemic has initiated a transformation of consumer spending trends as we know them.

Consumer Spending in Charts

By leveraging new data from analytics platform 1010Data, today’s infographic dives into the credit and debit card spending of five million U.S. consumers over the past few months.

Let’s see how their spending habits have evolved over that short timeframe:

The above data on consumer spending, which comes from 1010Data and powered by AI platform Exabel, is broken into 18 different categories:

• General Merchandise & Grocery: Big Box, Pharmacy, Wholesale Club, Grocery
• Retail: Apparel, Office Supplies, Pet Supplies
• Restaurant: Casual dining, Fast casual, Fast food, Fine dining
• Food Delivery: Food delivery, Grocery Delivery, Meal/Snack kit
• Travel: Airline, Car rental, Cruise, Hotel

It’s no surprise that COVID-19 has consumers cutting back on most of their purchases, but that doesn’t mean that specific categories don’t benefit from changes in consumer habits.

Consumer Spending Changes By Category

The onset of changing consumer behavior can be observed from February 25, 2020, when compared year-over-year (YoY).

As of May 12, 2020, combined spending in all categories dropped by almost 30% YoY. Here’s how that shakes out across the different categories, across two months.

General Merchandise & Grocery

This segment saw a sharp spike in initial spending, as Americans scrambled to stockpile on non-perishable food, hand sanitizer, and toilet paper from Big Box stores like Walmart, or Wholesale Clubs like Costco.

In particular, spending on groceries reached a YoY increase of 97.1% on March 18, 2020. However, these sudden panic-buying urges leveled out by the start of April.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Big Box	+14.2%	-1.5%	-15.7%
Grocery	+1.0%	+9.4%	+8.4%
Pharmacy	-3.6%	-23.8%	-20.2%
Wholesale Club	+13.0%	+2.6%	-10.4%

Pharmaceutical purchases dropped the most in this segment, possibly as individuals cut back on their healthcare expenditures during this time. In fact, in an April 2020 McKinsey survey of physicians, 80% reported a decline in patient volumes.

Retail

With less foot traffic in malls and entire stores forced to close, sales of apparel plummeted both in physical locations and over e-commerce platforms.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Apparel	-5.6%	-51.9%	-46.3%
Office Supplies	-8.9%	-2.8%	+6.1%
Pet Supplies	+2.7%	-18.5%	-21.2%

Interestingly, sales of office supplies rose as many pivoted to working from home. Many parents also likely required more of these resources to home-school their children.

Restaurant

The food and beverage industry has been hard-hit by COVID-19. While many businesses turned to delivery services to stay afloat, those in fine dining were less able to rely on such a shift, and spiraled by 88.2% by May 5, 2020, year-over-year.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Change	Overall Change
Casual Dining	-2.7%	-64.9%	-62.2%
Fast Casual	4.2%	-29.6%	-33.8%
Fast Food	2.0%	-20.9%	-22.9%
Fine Dining	-18.6%	-88.2%	-69.6%

Applebees or Olive Garden exemplify casual dining, while Panera or Chipotle characterize fast casual.

Food Delivery

Meanwhile, many consumers also shifted from eating out to home cooking. As a result, grocery delivery services jumped by over five-fold—with consumers spending a whopping 558.4% more at its April 19, 2020 peak compared to last year.

	Feb. 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Food Delivery	+18.8%	+67.1%	+48.3%
Grocery Delivery	+23.0%	+419.7%	+396.7%
Meal/ Snack Kit	+7.0%	-5.9%	-12.9%

Food delivery services are also in high demand, with Doordash seeing the highest growth in U.S. users than any other food delivery app in April.

Travel

While all travel categories experienced an immense decline, cruises suffered the worst blow by far, down by 87.0% in YoY spending since near the start of the pandemic.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Airline	-7.7%	-99.1%	-91.4%
Car Rental	-6.3%	-86.0%	-79.7%
Cruise	-18.7%	-105.7%	-87.0%
Hotel	-7.0%	-85.9%	-78.9%

Airlines have also come to a halt, nosediving by 91.4% in a 10-week span. In fact, governments worldwide have pooled together nearly $85 billion in an attempt to bail the industry out.

Hope on the Horizon?

Consumer spending offers a pulse of the economy’s health. These sharp drops in consumer spending fall in line with the steep decline in consumer confidence.

In fact, consumer confidence has eroded even more intensely than the stock market’s performance this quarter, as observed when the Index of Consumer Sentiment (ICS) is compared to the S&P 500 Index.

Many investors dumped their stocks as the coronavirus hit, but consumers tightened their purse strings even more. Yet, as the chart also shows, both the stock market and consumer sentiment are slowly but surely on the mend since April.

As the stay-at-home curtain cautiously begins to lift in the U.S., there may yet be hope for economic recovery on the horizon.

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