Thursday, October 14, 2021
If consumer finances are any indication, Kleinhenz added, "there’s reason to be optimistic: households remain in good shape with consumers in the aggregate actually underspending relative to current income. Even though enhanced unemployment benefits have expired and are no longer providing a boost to personal income, the loss is easily offset by the savings stockpiled since the coronavirus pandemic began."
Kleinhenz’s remarks were published in the October issue of the NRF’s Monthly Economic Review. The review noted that consumers’ mid-summer savings rate of 9.6 percent was noticeably above pre-pandemic levels and that income growth going forward should benefit from expected strong employment gains and higher wages. Child Tax Credit checks, set to be issued through December, should also help bump up spending, the NRF said.
The NRF also noted a sharp increase in retail sales in August: up 2.3 percent month-over-month and 12 percent year-over-year. For the first eight months of the year, retail sales grew 15 percent, compared with the first eight months of 2020, putting sales on track to grow between 10.5 percent and 13.5 percent for the full year, the NRF said.
“That strong momentum shows there’s a big disconnect between consumer confidence and consumer spending at the moment and that the downdraft in confidence may well be a false scent,” Kleinhenz said. “There’s a saying that you should never underestimate the American consumer—and its corollary is that you should watch what consumers do, not what they say."
One spending activity consumers seem to be returning to is restaurants, especially fast casual restaurants. The NPD Group reported that online and physical visits to fast casual restaurants during the 12 months ending Aug. 31, 2021, were up 8 percent compared to 2020. That means fast casual restaurant traffic in August was on par with August 2019, according to NPD’s data.
At the height of the pandemic and restaurant restrictions, in the quarter ending June 30, 2020, sales at fast casual restaurants were down 23 percent compared with the same period in 2019, based on NPD’s data. NPD specializes in data and analytics across numerous retailing verticals.
Generally, fast casual restaurants weren’t equipped to do much drive-through or take out sales in 2020, NPD noted in an Oct. 14, 2021, analysis. But those that had the capability prior to the pandemic did drive up traffic, NPD said. Many other fast casual restaurants pivoted to offer off-premise dining and/or drive through operations. One result: fast casual off-premise orders for the year ending Aug. 31 was up 30 percent, NPD said.
Further evidencing the growing demand for takeout, off-premises traffic across the restaurant sector went from just over half of traffic pre-pandemic to better than 80 percent for the year ending Aug. 31, according to NPD’s data.
“Fast casual restaurants have capitalized on the lessons they learned during the pandemic,” said David Portalatin, NPD senior vice president, industry advisor. “Their customers are happy to return because so many fast casual restaurants have built a strong clientele based on their innovation and ability to deliver quality customer experiences.”
Meanwhile, The Strawhecker Group just released an analysis of spending based on acquiring industry metrics it maintains. The analysis shows how the recovery is panning out in a few specific verticals.
For example, TSG’s metrics show spending at movie theaters and for babysitting services dropped like a stone last year: 73 percent lower in August 2020 compared to August 2019. No surprises there. But as social distancing became the norm in 2020, spending on activities that kept families together but not exposed to others rose, according to TSG’s metrics.
Spending at motor home dealers, for example, rose 48 percent. Boat dealers saw sales increase 35 percent, and spending on boat rentals was up 34 percent. Spending on motor homes has been keeping up the momentum, rising 13 percent in August compared to 2019, but boat dealers saw a 5 percent dip in sales over the same period, TSG wrote.
Spending at movie theaters has been rising in recent months—average monthly spend from June 2021 through August 2021 was $50,500 per month, or 35 percent over pre-pandemic levels. One cautionary note, however: even if movie theater spend remains at $50,500 per month, it will take 28 months for movie theaters to recover from revenues lost between March 2020 and May 2021, TSG said. 
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