Consumer Practice During Covid-19

Originally published in Corriere Canadese  www.corriere.ca 

TORONTO - The implementation of lockdown measures due to Covid-19 in early spring has led to a transformation in consumer spending habits.

While forced to stay at home, people re-prioritized what was essential and switched to online shopping. Panicking to stock up on groceries and non-perishable goods, shoppers grabbed high-demand items like hand sanitizer and toilet paper.

According to JP Morgan Research, an industry-leading investment analysis and advisory team, following a fixed growth rate of 1-2% month-to-month, the US food industry has experienced a huge spike since March, up to 20% in May of this year ( Graph 1 ).

Similarly, in the health and personal care category, market growth increased from 1% in March to 17% in May as lockdown restrictions began to ease.

During the spring and summer months, the "panic buying" of some items normalized as shoppers turned their attention elsewhere. Consumer trends in discretionary spending shifted to purchases that improved their surroundings as more people stayed close to home.

Those who had more time to spend indoors, whether they were laid off or worked from home, and who could afford it, spent time and money on home improvement projects. For example, home improvement stores saw a 31% increase in sales during the spring / summer, compared to the same period a year ago. As families spent more time together at home, items like swimming pools and hot tubs were in high demand.

According to Moneris, a Canadian payment processing company, pool sales and maintenance services were up 51% over the same period last year. The increase in sales has not only been in swimming pool shops, but the models have also sold out online.

If cooling off in your own pool wasn't an option, maybe taking a boat ride in the waves might have worked. Overall boat sales recorded a 17% increase across Canada. In Ontario, sales increased 26% from last year as more families sought to enjoy the province's lakes and waterways ( Figure 2 ).

Living in an ever-changing Canadian climate, with the summer season extending into the fall, has meant that consumers have added patio heaters and outdoor fireplaces to their must-have items. There is an increase in demand for outdoor stoves as families and restaurateurs seek to extend the outdoor patio season without sacrificing comfort and warmth. This type of discretionary spending is reflected in the changes in our lifestyle. As the weather gets colder and we stay indoors, spending on items such as appliances, indoor fireplaces and furniture is likely to increase as well. Other hobby-related items such as sewing, games and electronics can also be expected to see increased sales.

According to the Deloitte 2020 Holiday Retail Outlook Report, households expect to spend 18% less than last year. Now, with further restrictions and lockdowns in Covid-19 "hotspots" like Toronto and the Peel region, small businesses that struggled to survive the impact of the first wave, with doors closing to the public, could be pushed towards financial ruin.

Despite the staggering increase in Covid-19 cases and tougher control measures, Canadians understand the importance of supporting each other. According to a Moneris survey, 76% of Canadians intend to shop locally and support their communities. The move to online shopping will see around 70% of Canadians choose this option, a popularity that is increasing especially in the stricter restricted areas. No matter what the circumstances, Canadians are resilient. Even with the ongoing Covid-19 pandemic, options exist to help keep communities strong. Shop locally, whether they're online or to pick up on the curb, stay safe and support local businesses when making your next purchase.