With a vaccine still out of reach and many companies pushing return-to-office dates back until at least summer 2021, people with the means to do so are increasingly buying what they need to hunker down for the pandemic long-haul.
“Traditionally, during an economic recession, you would expect to see discretionary categories, such as home furnishings, consumer electronics or big-ticket items like appliances, take a hit,” said Andrew Lipsman, an analyst at the data analytics firm eMarketer. “What’s interesting is that the pandemic has caused a couple of these categories to really buck that trend.”
Some start spending on luxuries again
Even as millions of Americans remain unemployed, workers who have kept their jobs and are not dining out or going on vacations may find themselves with seemingly more discretionary money to spend.
“If you’re still working from home and you’re getting a steady paycheck, you may feel confident enough to splurge on a renovation,” said Ted Rossman, an industry analyst for CreditCards.com. “There’s actually a shortage of things like refrigerators, as we’re seeing a big increase in demand.”
Others, sick of grocery shopping and the taste of their own cooking, are choosing take out instead. Chipotle said revenue increased 14.1 percent in the third quarter compared with last year. Revenue decreased 4.8 percent in the second quarter.
Spending on staples stabilizes
Sales of basic necessities like groceries are leveling out, months after people panic-bought toilet paper and cleaning supplies.
The grocery chain Albertson’s reported sales and other revenue increased more than 11 percent to $15.8 billion during the second quarter, compared to $14.2 billion during the same period last year, with revenue from digital sales up 243 percent as consumers looked to avoid crowded stores.
Coronavirus testing businesses see boost
Abbott Laboratories Inc. and Thermo Fisher Scientific Inc, both big players in coronavirus testing, reported significant growth. Abbott’s $881 million in Covid-19 testing revenue accounted for nearly 10 percent of its total sales in the third quarter, and Thermo Fisher generated $2 billion in Covid-19 related revenue, up from $1.3 billion last quarter.
Most economists agree this much is clear: The main thing holding back the economy is not formal restrictions. It is people’s continued fear of the virus itself.
A growing body of research has concluded that the steep drop in economic activity last spring was primarily a result of individual decisions by consumers and businesses rather than legal mandates, report Ben Casselman and Jim Tankersley.
Iowa was one of only a handful of states that never imposed a full stay-at-home order. Restaurants, movie theaters, hair salons and bars were allowed to reopen starting in May, earlier than in most states. Gov. Kim Reynolds has emphasized the need to make the economy a priority, and has blocked cities and towns from requiring masks or imposing many other restrictions.
Even so, Iowa has regained just over half of the 186,000 jobs it lost between February and April, and progress — as in the country as a whole — is slowing. Many businesses worry they won’t be able to make it through the winter without more help from Congress. Others have already failed. Now, coronavirus cases are rising there.
“You can’t just open the economy and expect everything to go back to pre-Covid levels,” said Michael Luca, a Harvard Business School economist who has studied the impact of restrictions during the pandemic. “If a market is not safe, people won’t participate in it.”