Much has changed over the past several months. With many individuals working from home—or not working at all—unemployment rates have soared. Over 10 million Americans find themselves without jobs. Children are learning online or being homeschooled, while numerous regions continue to face lockdowns. In my area, bars, restaurants, movie theaters, and various entertainment venues remain closed.
However, there have also been more nuanced shifts, particularly in our spending habits. The tightness of our “purse strings” has evolved. How exactly has the pandemic influenced our purchasing behaviors? According to a study by Ibotta, a cash-back app designed to help consumers save on everyday expenses, significant changes have emerged, especially at the onset of the pandemic.
Key Findings
- Sales of spirits have increased by 33%
- Bakery goods have risen by 17%
- Meat, poultry, and seafood purchases are up 16%
- Sales of condiments, sauces, and seasonings have grown by 15%
- Deli items also experienced a 15% increase
- Beauty and grooming products saw a 14% rise
- Canned goods and soups reported a 13% uptick
- Wine sales climbed by 12%
- Frozen food purchases also rose by 12%
- Health and wellness products experienced a 10% increase
Additional growth has been seen in household essentials, the beverage sector, and candy, because who doesn’t need more chocolate bars or paper towels?
On the other hand, certain industries have faced severe downturns. The apparel sector, for instance, suffered a staggering 37% drop in sales. Spending on travel, entertainment, and transportation has also decreased significantly. With more Americans working from home, demand for oil and gas has plummeted, further impacting the retail industry. Numerous retailers, such as Brooks Brothers and GNC, declared bankruptcy in 2020.
This trend isn’t surprising. Like many, I’ve been coping with the stress through baked goods and beverages. My bulk purchases of toilet paper have skyrocketed, and food delivery expenses have spiked at home. I find myself ordering takeout several times a week. Meanwhile, my spending on clothing has decreased dramatically—I now live in leggings and sweats, and shopping for new outfits is not a priority. My entertainment expenses have also diminished, with the exception of renting “Trolls: World Tour” last spring. I’ve even cut back on toy purchases, realizing how easily I used to be tempted by spontaneous buys at Target. Others have echoed similar shifts in their family’s spending, like Sarah Johnson and Emily Carter.
“Gas, movie expenses, and fees for high school activities have dropped considerably,” Johnson shared. “Yet we’ve added another streaming service and increased our internet speed, which costs more.”
“I haven’t bought any new clothes and stopped going to the salon for root touch-ups every three weeks. Impulse buys have become rare,” Carter remarked. “However, I have invested in technology. We upgraded our phones and got a laptop for online schooling.” Many have noted changes in their spending as we all adapt to living, learning, and working from home.
Notably, not every spending change has been predictable or practical. Nicole Parker, a mother of three, admitted she’s been buying pre-made croutons in bulk. Amanda Lee confessed to purchasing items she sees on TikTok—makeup, vacuum cleaners, toys; if it trends, she buys it. Numerous people acknowledged stocking up (or hoarding) crafting, organizing, and baking supplies. Who would have thought cupcake liners and vanilla extract would become sought-after items?
“With all the changes we faced in 2020, it’s natural for consumer shopping habits to shift,” said Mark Thompson, the CEO of Ibotta. “The increase in sales of baked goods, beverages, and spirits makes sense, given how much time we are spending at home instead of frequenting our favorite coffee shops or bars.”
When asked about potential shifts in spending habits for 2021, Thompson admitted uncertainty. However, he anticipates that some changes will endure. “While we expect some shopping behaviors to revert to normal, many of the new habits will likely stick around,” he noted. “For instance, online grocery shopping and the growth of buy online, pick-up in-store or curbside services are trends that will probably remain.”
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Summary
The pandemic has led to notable changes in consumer spending habits, with significant increases in bakery goods, liquor, and household essentials. Conversely, sectors like apparel and travel have suffered considerable declines. As we continue to adapt to new norms, these shifts in spending may persist into 2021.