RE PORT

COVID-19 Retail Impact Check-In

An update to sector spending trends as states begin to re-open

May 20, 2020

In our initial COVID-19 Impact report, we were looking at the immediate consumer response to the national emergency. There was a quick flight to safety — discretionary purchases were slashed, travel and leisure spending was all but erased, and consumer staples were stockpiled.

Our second report focused on the changes to how Americans purchased food. Sit-down restaurants suffered the biggest declines with dine-in service banned, but quick service restaurants were also hit. The few bright spots were reserved for food-delivery services that delivered either groceries or restaurant meals.

In this report, we are revisiting some of those industries to see which ones are still falling, stabilizing, or growing. Some industries will benefit as states emerge from lockdowns, but others will need a larger turn in consumer confidence.

Although most states were under stay-at-home orders, actual consumer responses varied by state.

In hard hit areas like New York and Massachusetts, total consumer spending fell between 30-40%

year-over-year for the entire month. Less severe areas like Georgia and Texas only saw declines like

that during the first week of April and spent most of the month down only 15-20%.

WHERE MIGHT REOPENING HELP?

CONSUMER SPENDING, YEAR-OVER-YEAR

-50%

-40%

-30%

-20%

-10%

0%

10%

04/01/20

04/04/20

04/07/20

04/10/20

04/13/20

04/16/20

04/19/20

04/22/20

04/25/20

04/28/20

05/01/20

05/04/20

05/07/20

NY MA GA TX National

Restaurant spending mirrored those differences — New York and Massachusetts again showed more

severe declines than Georgia or Texas. If that stays true, then restaurant spending looks likely to

improve as more states open.

RESTAURANT SPENDING, YEAR-OVER-YEAR

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

04/01/20

04/04/20

04/07/20

04/10/20

04/13/20

04/16/20

04/19/20

04/22/20

04/25/20

04/28/20

05/01/20

05/04/20

05/07/20

NY MA GA TX National

General Merchandise and Grocery stores are a different story. This group of big box, pharmacy, and

grocery stores showed much smaller disparities across states than the restaurants. Where Georgia

and Texas were 30% better off than New York and Massachusetts with restaurant spending, they

were only 5-10% better in this industry. Here, reopening does not seem to offer a meaningful boost

to spend.

GENERAL MERCHANDISE AND GROCERY STORES SPENDING, YEAR-OVER-YEAR

-25%

-20%

-15%

-10%

-5%

0%

5%

04/01/20

04/04/20

04/07/20

04/10/20

04/13/20

04/16/20

04/19/20

04/22/20

04/25/20

04/28/20

05/01/20

05/04/20

05/07/20

NY MA GA TX National

Could Delayed Taxes Help?With the IRS delaying the tax season until July 15th, later than normal tax returns could become a

new stimulus. The typical April rush to file taxes was completely erased in 2020, with spend on tax

prep services 30% below prior year levels.

TAX PREP SPEND, INDEXED TO MARCH 2019 AVG. DAILY SPEND

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2020 2019

02/01/20

02/08/20

02/15/20

02/22/20

02/29/20

03/07/20

03/21/20

03/14/20

03/28/20

04/04/20

04/11/20

04/18/20

04/25/20

05/02/20

Travel Industry Still Waiting for a PulseLater in the report, we will talk about some bright spots. Unfortunately, the travel industry is not

one. The cruise industry fell first with the first major outbreak on the Diamond Princess. The airlines

quickly followed as people stopped booking new trips (airlines charge at time of booking), and

both car rentals and hotels were next as people stopped traveling altogether (both charge at

checkout). For almost three weeks, our data has shown cruise operators refunding more money

than they are booking.

TRAVEL SPENDING, YEAR-OVER-YEAR

-140%

-120%

-100%

-80%

-60%

-40%

-20%

0%

Cruise Airline Car Rental Hotel

03/01/20

03/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/19/20

04/12/20

04/26/20

05/03/20

Wholesale Club Customers Working Through Stockpiles and Moving OnlineWholesale clubs like Sam’s Club and Costco saw the earliest boost in spend as consumers stocked

up. However, sales moderated through April as people worked through their stockpiles. Between

20-30% percent of wholesale club customers had made an extra purchase during March and

average purchases were up 20% from normal levels. With so much March activity, early April was

bound to suffer.

WHOLESALE CLUB SPENDING, YEAR-OVER-YEAR

WHOLESALE CLUB AVERAGE SPEND PER TRANSACTION

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Wholesale Club

03/01/20

32/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/19/20

04/12/20

04/19/20

05/03/20

$80

$85

$90

$95

$100

$105

$110

$115

$120

$125

01/01/20

01/08/20

01/15/20

01/22/20

01/29/20

02/05/20

02/12/20

02/19/20

02/26/20

03/04/20

03/11/20

03/18/20

03/25/20

04/01/20

04/08/20

04/15/20

04/22/20

04/29/20

Wholesale Club

Store closures and limited store capacity from social distancing have led to one big opportunity

— a chance to increase online penetration. Wholesale clubs have been slow to integrate a full

digital platform. Recently, online penetration has doubled from 6- 12% of total sales.

WHOLESALE CLUB ONLINE SHARE OF NON-GAS SALES

0%

2%

4%

6%

8%

10%

12%

14%

16%

01/01/20

01/08/20

01/15/20

01/22/20

01/29/20

02/05/20

02/12/20

02/19/20

02/26/20

03/04/20

03/11/20

03/18/20

03/25/20

04/01/20

04/08/20

04/15/20

04/22/20

04/29/20

Wholesale Club

Total sales also doubled year-over-year. This is giving retailers a chance to improve their online

merchandising strategies with a captive audience.

WHOLESALE CLUB ONLINE SPENDING, YEAR-OVER-YEAR

0%

20%

40%

60%

80%

100%

120%

140%

02/01/20

02/08/20

02/15/20

02/22/20

02/29/20

03/07/20

03/14/20

03/21/20

03/28/20

04/04/20

04/11/20

04/18/20

04/25/20

05/02/20

Wholesale Club

Consumer Staples Mostly Thriving, but Pharmacies are Just SurvivingIn general, stores that cater to consumer staples have held up better than those focused on

discretionary spending. Panic buying at big box and grocery stores has slowed to more normal

growth levels. On the other hand, pharmacies have a different, lower trend. In March, there was

20% more spend than January and February monthly levels. Pharmacy purchases tend to be

longer lasting than groceries, so panic buying created a slower-consumable stockpile. That meant

by April, sales fell to 16% below January and February levels to offset the March increase.

CONSUMER STAPLE SPENDING, YEAR-OVER-YEAR

-40%

-20%

0%

20%

40%

60%

80%

100%

03/01/20

03/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/12/20

04/19/20

04/26/20

05/03/20

Big Box Grocery Pharmacy

New Clothes Aren’t a PriorityIn the first weeks of the shutdown clothing-based stores were among the hardest hit. Store-based

retailers bottomed out at an 80% year-over-year decline in late March, and internet-based retailers

fared slightly better down 60%. Department stores fell by a similar amount. Since then, apparel

retailers have staged a small rally to exit April down 50% while department stores are only slightly

off their lows.

CLOTHING FOCUSED SPENDING, YEAR-OVER-YEAR

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Store-Based Apparel Internet-Based Apparel Department Store

03/01/20

03/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/12/20

04/19/20

04/26/20

05/03/20

For the store-based retailers, state-level spending was not clearly tied to lockdowns. While New

York was about 10% below the national average, Massachusetts was above average, and Texas was

right at average. Massachusetts’ lockdown was more severe than Texas’. People are getting more

comfortable spending money on clothing whether or not their state is reopening.

STORE-BASED APPAREL RETAILERS SPENDING, YEAR-OVER-YEAR

-85%

-80%

-75%

-70%

-65%

-60%

-55%

-50%

-45%

-40%

NY MA GA TX National

04/01/20

04/04/20

04/07/20

04/10/20

04/13/20

04/16/20

04/19/20

04/28/20

05/04/20

05/01/20

04/25/20

04/22/20

05/07/20

Home Improvement is Booming While people are sitting at home, they have made it a priority to improve their surroundings. The

big winner has been home improvement, with sales accelerating in the back half of April.

HOME IMPROVEMENT SPENDING, YEAR-OVER-YEAR

0%

10%

20%

30%

40%

50%

60%

70%

03/01/20

03/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/12/20

04/26/20

04/19/20

05/03/20

Home Improvement

Furniture and other home furnishings spend has depended on the channel. Traditional store-

based retailers saw their total sales (in-store and online) fall by 50% before slowly recovering,

while internet-based retailers are experiencing record growth.

HOME FURNISHING SPENDING, YEAR-OVER-YEAR

-100%

-50%

0%

50%

100%

150%

200%

Store-Based Home Furnishings Online Home Furnishings

03/01/20

03/08/20

03/15/20

03/22/20

03/29/20

04/05/20

04/12/20

04/26/20

04/19/20

05/03/20

Total spending across all three industries has improved at a national level. While less hard hit and quicker

to open states have outperformed the national average, even New York and California lockdowns have not

stopped home spending from recovering. Here, reopenings might not increase spend. As additional leisure

activities become available, home improvement projects could stall.

HOME IMPROVEMENT AND FURNISHING SPEND, YEAR-OVER-YEAR

WHAT ELSE ARE WE WATCHING?Like travel, most leisure industries are still waiting for a change. Gym memberships are still on

hold as most remain closed. While we are starting to see small accelerations in Georgia, it is too

soon to see if the increase is real or just automated billing coming back online. Theme parks are

also shut down, but summer spending is still a month away for parks outside of Florida, Texas,

and California.

With trends changing every day, be sure to follow our dashboards at 1010data.exabel.com/

covid-19/ for updated information.

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-40%

-20%

0%

20%

40%

60%

80%

NY MA GA TX National

04/01/20

04/16/20

04/10/20

04/13/20

04/07/20

04/04/20

04/19/20

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05/04/20

05/01/20

05/07/20

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anticipate and respond to change. Our time series-driven collaborative analytics, consumer intelligence and alternative

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Media Contacts

Meir Kahtan, Public Relationsmkahtan@rcn.com, +1 212.575.8188

Frank Riva, 1010data VP of Marketing frank.riva@1010data.com

This report was built using 1010data’s panel of US consumer transactions that tracks the credit

and debit card spending of 5 million US consumers. These findings are not adjusted for cash

transactions or store credit spend. All findings presented in this report relate to this panel of

consumers and is not an attempt to reflect the behavior of all US consumers.

1010DATA METHODOLOGY