The coronavirus 2019 (COVID-19) outbreak is a global crisis that has significantly changed several people’s day-to-day lives in many ways. For example, the pandemic has led to new regulations such as lockdowns, and social distancing generating severe consumer behavior disruptions. In the article featured in the New York Times, Leatherby and Geller (2020) state that the rate at which people spend their money has rapidly decreased due to the emergence of the virus in the United States. Most businesses have shut down due to COVID-19, rendered many people jobless, and resulted in limited spending of the less money saved as shown by a debit and credit card spending graph. This paper analyses the article “How the Virus Transformed Money Spending among the Americans” by Lauren Leatherby and David Geller. It will focus on the level of consumer spending in different sectors of the economy.
The sales on household requirements to businesses dealing with online groceries and meal kits had risen by 7% (Leatherby & Geller, 2020). The restaurants delivering food at their customer’s premises have remained in business, although the sales have not changed. An increase in expenditure on groceries is due to the closure of restaurants. Some fewer people dine on fast foods at the eateries because they are now at home (Webster, 2020). Individuals working from home still have secure jobs which help them afford to buy groceries online compared to the majority, who are unemployed during the coronavirus pandemic.
The U.S. recorded negative sales in the traveling sector. 90% of the consumers could not use airplanes to fly, 80% declined booking rooms and cruises, 75% of the sales on online travel agencies reduced, and 60% refrained from spending on traveling by cars (Leatherby & Geller, 2020). The people entirely refrain from traveling using planes, mainly to New York or other countries. Those who utilize alternative means of transport on the streets have rapidly decreased in number. Many are unemployed and the economy is locked down, leading to less consumer spending on transportation. The media and entertainment industry are affected by people’s practices. At home, 75% of people spend more time gaming, 40% of them use streaming services, 10% follow news media or read E-books (Aizenstros, 2020). No one goes to movie theatres, and more people spend less on sporting events. Entertainment services such as Netflix and Disney+ which are offered online have grown during the COVID-19 pandemic because people cannot visit public places due to social distancing.
Almost all Americans do not shop in departmental discount stores and buy electronics. The virus has triggered the consumers’ level of spending on shopping for luxurious items. Instead, the majority of the population focuses on the essential things because they are unsure of when the pandemic will be over. The retail industry has contracted because people are not buying clothes and expensive accessories (Aizenstros, 2020). Expenditure on health has decreased significantly since people do not visit hospitals and exercise in gyms or buy drugs in pharmacies. Spending is low as the doctors who have another specialization from the virus-like dentists do not work leading to low income.
COVID-19 virus has led to a breakdown of numerous industrial sectors in the economy resulting in a change in consumer spending patterns. A fall in the Americans’ expenditure level on transport, entertainment, health, and household items is an indicator of a shift in consumer behavior after the emergence of the virus in the economy. People have to utilize the little financial resources they possess on essential items such as groceries because many of them are jobless and have to stay at home to prevent infection from the virus.
References
Aizenstros, J. (2020). Changes in consumer spending are transforming industries. Forbes. Web.
Leatherby, L., & Geller, D. (2020). How the virus transformed the way Americans spend their money. New York Times. Web.
Webster, K. (2020). What 2K consumers told PYMNTS about how COVID-19 changed their daily lives. PYMNTS. Web.