How consumers are coping with coronavirus

March 25, 2020 11:10 AM

For a growing number of people, the coronavirus has disrupted their daily lives in how they work, where they eat and how they spend their money. This drastic change has caused a boom in some sectors of the economy and a bust in other areas.

As the number of coronavirus cases begins to exceed 500,000 globally according to the interactive map from Johns Hopkins Coronavirus Resource Center, the impact could be expected to go on for some time, and thereby have longer-lasting effects on the payments industry. This is especially true as cities and states across the U.S. are banning large gatherings and the CDC is also recommending that gatherings of groups of 10 or more people in high-risk categories be cancelled.

The impact of more Americans working and distance learning from home has reverberated throughout the economy. According to the data science team at Womply which is conducting daily data analysis of transaction trends year-over-year at 400,000 local businesses across the country, in the week ending March 13 the U.S. saw an 85% increase in purchases made at food, beverage and grocery stores compared to the same week last year. Health care also saw a rise of 7% for the week compared to a year earlier, which was most likely due to coronavirus testing and treatment, since Americans are being highly encouraged to postpone any elective treatments.

The entertainment industry sustained a 37% in spending that week as consumers began staying away from movie theaters and comedy clubs. However, the biggest drop in spending is from the transportation industry, suffering an 85% drop in spending as fewer consumers are traveling or commuting.

Movie theater chain AMC announced on March 17^th that it will close all of its 661 U.S. movie theaters for 6 to 12 weeks while the coronavirus spreads. This came after its competitor Regal Movies tweeted that it was closing all of its 549 U.S. theaters until further notice.

In the airline industry, Delta announced in a letter to employees that its revenue is expected to decline by $2 billion for the month of March due to consumers flying less, and therefore it will park half of its fleet until further notice. United announced that it was cutting its capacity by 60% overall, which included an 85% reduction in international flights.

While images of empty grocery store shelves may be common in the media, grocery hoarding was not necessarily a common event across all U.S. states. Based on data from Womply, some states were ravaged more than others (such as Utah), while a few states actually saw a drop in spending.

Utah saw a 191% weekly change in grocery store spending compared to the same week last year, followed by Wyoming at 101% and Colorado at 94%. Wisconsin and Nevada saw a decrease in weekly year-over-year grocery store spending of -27% and -12% respectively.

The largest states in terms of population also saw strong weekly grocery store sales growth, with California experiencing a 37% rise, Texas at 46%, Florida averaging 34% and New York coming in at 58% growth over the same week in 2019. The states of Washington and Oregon, which have been strongly affected by the coronavirus, experienced more moderate weekly sales growth of 21% and 4% respectively.

It should come as no surprise that the coronavirus is the top stressor for Americans today, yet money problems are not far behind.

According to a March 2020 WalletHub survey of U.S. adults, 28% responded that the coronavirus was their top worry.

Money was the second most stressful issue for Americans at 26%, followed by the 2020 elections at 18%. Despite the potential for the disease being spread by polling places, voters still turned out for the recent Democratic primaries held in several states. However, there were changes made to polling locations in Florida for its primary, as many sites were originally scheduled to be held in assisted living and senior centers.

Working from home is quickly becoming a new reality for many salaried office workers, yet the fear of not working at all is a potential reality for hourly workers and those paid by the job. According to a Kaiser Family Foundation survey conducted in March 2020, about 60% of hourly workers and self-employed workers, along with 61% of those paid by the job such as Uber and Lyft drivers, reported that they were worried about losing income due to office/factory closures and reduced hours. Only 38% of salaried workers feared losing income due to closures or reduced hours.

Uber and Lyft announced that they were suspending their carpooling service in the U.S. and Canada to contain the spread of the coronavirus, bringing home a reality of reduced pay for some of their drivers. In an effort to support local businesses, Uber also announced that it was waiving the delivery fee on its Uber Eats platform for 100,000 independent local restaurants in the U.S. and Canada.

Even more telling is the fact that almost half (46%) of hourly workers felt worried that they were at higher risk of exposure to coronavirus because they can’t miss work.

Having little to no opportunities to visit a movie theater, eat at a local restaurant or attend a concert, more Americans are saving money than ever before. Based on data from a March 2020 WalletHub survey, 158 million Americans reported that they are now saving more money.

According to the survey, about 94 million Americans canceled or planned to cancel any upcoming travel. Many companies across the U.S. have restricted or even banned corporate travel, which is severely impacting airlines, hotels and spas. American Airlines announced in reaction to the virus and reduction in consumer spending, it was cutting 75% of its international capacity between March 16^th and May 6^th.

Additionally, the White House has issued guidelines that all Americans should avoid discretionary travel, shopping trips and social visits. These guidelines are likely to impact the livelihood of many. According to the WalletHub survey, 67 million Americans expect to have trouble paying their credit card bill.