The past ten months have brought significant changes to our daily lives. Many people have transitioned to remote work, and unemployment rates have soared. Over 10 million Americans are still facing joblessness. Children are engaging in virtual schooling or being homeschooled, while lockdowns remain in effect in several regions. In my area, bars, restaurants, cinemas, and other entertainment venues are still closed.
Amid these challenges, some shifts in consumer spending have emerged. While many of us are tightening our budgets, the pandemic has notably influenced how we allocate our finances. A study by Ibotta, a cash-back app assisting consumers with everyday purchases, highlights some significant changes in spending, particularly at the pandemic’s onset.
Trends Observed in Consumer Spending
- Sales of spirits have risen by 33%
- Bakery goods have increased by 17%
- Purchases of meat, poultry, and seafood are up 16%
- Sales of condiments, sauces, and seasonings have increased by 15%
- Deli products saw a 15% rise
- Beauty and grooming items are up 14%
- Canned goods and soups experienced a 13% boost in sales
- Wine sales are up by 12%
- Frozen food sales have also increased by 12%
- Health and wellness products have seen a 10% increase
Other sectors, including household essentials, beverages, and sweets, have also reported growth—because who doesn’t enjoy indulging in chocolate or stocking up on paper towels?
Conversely, certain industries have faced severe declines. The apparel sector has been particularly hard hit, with a staggering 37% drop in sales. Spending on travel, entertainment, and transportation has also decreased significantly. As remote work becomes the norm, demand for oil and gas has plummeted, and many retailers have struggled, leading to numerous bankruptcies in 2020, including well-known names like Brooks Brothers and GNC.
These trends come as no surprise to many of us. Personally, I’ve found comfort in baked goods and beverages. My household has seen a sharp rise in food delivery expenses, and I’ve resorted to buying toilet paper in bulk. While my clothing purchases have dwindled—opting instead for comfy athletic wear—my entertainment expenses have plummeted. I did, however, treat myself to a family movie night with a rental of “Trolls: World Tour” last spring. Similar experiences have been echoed by others, such as Laura and Tim, who shared their spending adjustments.
“Expenses for gas, movies, and extracurriculars have really dropped,” Laura mentioned. “But we did add another streaming service and upgraded our internet for better connectivity.”
“I’ve hardly bought any new clothes and skipped salon visits,” Tim added. “But we invested in tech, like a new laptop for online learning.”
Many others have observed similar spending patterns, adapting to life at home. Interestingly, some changes in spending seem rather unpredictable. Nicole, a mother of three, surprised herself by purchasing croutons in bulk. Meanwhile, Amanda confessed to buying items she sees on TikTok, from makeup to gadgets. “If it’s trending, I buy it,” she admitted. Moreover, many have started stockpiling crafting and baking supplies, revealing how items like cupcake liners and vanilla extract have become unexpectedly popular.
Bryan Leach, Ibotta’s founder and CEO, noted, “Given the changes we experienced in 2020, it makes sense that shopping habits would shift. The increases in bakery goods and beverages reflect how much time we’re spending at home instead of frequenting local cafes or bars.”
As for the future of our spending habits in 2021, Leach believes that while some behaviors might revert to previous norms, many changes will likely become permanent. “We expect some habits to normalize, yet the rise in online grocery shopping and curbside pickup trends are probably here to stay,” he stated.
For more insights on changing consumer behaviors, explore this related blog post. Additionally, you can check out Make a Mom for expert advice on home insemination kits and visit March of Dimes for excellent resources on pregnancy and home insemination.
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Summary:
The pandemic has significantly altered consumer spending habits, with notable increases in bakery items and liquor sales as people adapt to life at home. While some industries have thrived, others, like apparel and travel, have suffered steep declines. As we move into 2021, many of these changes are likely to persist, with a continued focus on online shopping and at-home indulgences.