Americans have tracked the coronavirus pandemic’s progress by watching case counts and positivity rates. But if they watched their shopping carts and Amazon Prime
orders, they would have seen the story of pandemic unfold there too.
Consumer spending data from the Bureau of Economic Analysis, Nielsen IQ and The NPD Group vividly illustrate how the pandemic changed our buying habits, showing which products we snapped up while others gathered dust on store shelves.
Sales of specialty cheeses rose as bored consumers with disposable income looked to recreate a restaurant experience at home.
The early days of the novel coronavirus brought stories of worried shoppers stocking up on toilet paper, Clorox wipes
and hand sanitizer. But as the pandemic took hold and upended daily routines, COVID affected every sector, taking a toll in sometimes unexpected ways.
“It’s probably the first consumer trend where every single consumer has been impacted by it,” said Carman Allison, vice president of consumer insights at the consumer-data company Nielsen IQ.
Previous shifts, like the rise in popularity of organic food, for example, haven’t touched every demographic the same way the pandemic has.
Some households have thrived financially
Spending has changed, but some households have thrived financially while others have sunk, just as some have stayed healthy and others have gotten sick and died. Those disparities peek out of the purchase data.
For instance, sales of specialty cheeses shot up as bored consumers with disposable income looked to recreate a restaurant experience at home, Allison said. Kidney beans sales rose too, a sign of financially-strapped households seeking cheap sources of protein, Allison said.
“It became polarization of the haves and have-nots,” Allison told MarketWatch.
Those who could afford to do so pampered themselves, especially people who escaped the cities. People splurged on big-ticket luxuries, with spending on pleasure boats soaring 42% from $18.7 billion in February 2020 to $26.6 billion in January 2021, according to the Bureau of Economic Analysis.
‘5 pillars of the COVID lifestyle’
Meanwhile, spending on funerals and burial services increased by 38.1% during that time. In fact, funerals have been one of the few experiences that consumers have continued to spend money on.
Americans halted most other purchases involving gathering in groups. They stopped going to the movies, concerts, and amusement parks and they stopped traveling, taking vacations and staying in hotels.
You were hard pressed to find a portable swimming pool because people were figuring out how to entertain their kids at home.
U.S. consumers typically spend close to half a trillion dollars — $500 billion a year — on just those things alone, said Marshal Cohen, chief industry advisor at The NPD Group, a market research firm.
“When you stop spending that, that made consumers have money to spend on other things,” Cohen said.
Consumers redirected their purchasing toward what Cohen calls “the five pillars of the COVID lifestyle”: working from home, entertaining at home, educating at home, exercising at home, and keeping a “healthy home,” by which he means people keeping their abodes clean and germ-free, which has in turn spurred sales of air purifiers and vacuum cleaners.
We spent our time differently too
The No. 1 way people used their spare time was by watching more TV, followed by cleaning more and cooking more, according to a consumer survey NPD Group conducted in February.
Spending on TVs increased — a trend big-box retailers noticed after the government distributed stimulus checks — as did spending on subscription streaming services to watch on them.
People have also been reading more, making music and gardening more, according to data on sales of recreational books, musical instruments and seeds. And it’s clear parents have been trying hard to keep their kids busy at home. Spending on toys, games and hobbies increased, and items such as kiddie pools flew off the shelves.
“You couldn’t buy a portable swimming pool in this country because people were trying to figure out how they were going to entertain their kids in the summer,” Cohen said.
Contradictions in the spending data
There are examples of unintended consequences and some poignant takeaways in the spending numbers. We stocked up on oranges to fortify our immune systems. But we bought far less cold and flu medicine, in part because social distancing and masks made getting sick a relative rarity.
We increased our spending on new cars, but spent less on gasoline. Sales of orthotics drooped, likely a result of people who are often on their feet in restaurant and retail jobs being laid off in record numbers, Allison said.
What will shoppers do next
“Some of the lifestyles that we saw emerge during COVID are going to remain,” Cohen said. People will continue to want a clean, healthy home; they’ll continue to cook, he predicts.
“We spent all this money on that fancy Peloton
exercise bike or that fancy treadmill, and we’re not running back to the gym, so we’re going to want to keep using those products or getting those products,” he said.
Consumers will gradually start to spend again on clothes and luggage as they emerge from being homebound, he said.
However, people’s ability to spend will also have to keep pace with their desire to do so. And those don’t match up yet.
A NielsenIQ analysis released in late February identified a “rapidly growing” group of consumers who consider themselves to be “newly constrained” in their ability to spend, meaning that they’ve suffered a financial setback like a job loss in their household. The share of consumers who say they fall into this group doubled between September and December from 23% to 46%.
Another factor: shoppers’ uneasiness about returning to in-person interactions at brick-and-mortar stores and elsewhere.
Also complicating matters is the speed at which people are getting vaccinated. “Even though we can see the light at the end of the tunnel, I don’t think that light is as bright as we think it is,” Allison said. “It all has to do with the number of people who are willing to get vaccinated.”
The share of people who say they want to “wait and see” before they get a vaccine shot themselves is declining, but it was still at 22% as of February.