Consumers are buying less while shopping online more
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Americans are spending less right now — retail sales were down more than 8% in March, and economists expect a steeper decline in April.
Meanwhile, more of what consumers are buying comes at the click of a mouse or the touch of a smartphone screen.
The Marketplace-Edison Research Poll found that 4 in 10 consumers who were already shopping online for groceries or other goods before the pandemic are now doing it more.
“We do a lot of Amazon and online shopping anyway, and I would definitely say it has increased for sure,” said David Blevins. He lives in Clarksville, Tennessee, with his wife and three kids. He owns a Chick-fil-A franchise that’s been open, and busier than ever, since the pandemic hit.
Blevins said shopping in person right now “is a hassle — either they’re not open or stores have limited hours.” Shopping on the internet, he said, “you don’t have to get out of the house. My wife’s trying to stay in the house with the kids as much as possible. It’s driving her crazy, actually.”
The rise in online shopping is likely to persist post-pandemic, said retail analyst Camilla Yanushevsky at CFRA Research.
“The survey data says that even when the stay-at-home orders are lifted, people still want to avoid public places.”
Yanushevsky points out that with online shopping, it’s easy to compare prices and save.
“It allows the consumer to be more frugal,” she said. “Grocery stores and other retailers spend a lot of marketing and analytics to spur impulse purchases, especially around the checkout counter.”
Frugality is a high priority right now, said Robert Farrokhnia at Columbia Business School. In a recent National Bureau of Economic Research working paper, “Income, Liquidity and the Consumption Response to the 2020 Economic Stimulus Payments,” he and colleagues examined how families at different income levels are spending their $1,200-$2,400 federal pandemic stimulus checks.
For those at low- and middle-income levels who have little savings in the bank to provide an emergency financial cushion, Farrokhnia said, households are spending primarily on “nondurable goods: food, pharmacies, supermarkets and so on. And there are very few expenditures on durable goods — washing machines, cars, appliances or electronics.”
According to the Marketplace-Edison Research Poll, those making less than $25,000 a year are the least likely to have shopped online before the pandemic and to have shifted to online shopping now.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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