While home staples and athleisure was popular before the pandemic, it has quickly become a way of life. Everything about supply and demand has changed, and anything we knew about trends from before the pandemic can basically be forgotten, according to assistant professor of economics at Northwestern University, Piotr Dworczak.
Americans are now spending significantly more money on at-home staples like instant coffee, eggs, ketchup, cheese and sliced ham than they did this time last year, according to analysis by Nielsen Co, the Brewers Association, and StyleSage Co.
There has also been a surprising uptick in splurge spending in electronics and fashion, with Nike (NYSE: NKE), Lululemon (NASDAQ: LULU), and Louis Vuttion (OTC: LVMUY) all selling well, and at higher prices. While many people have been furloughed or laid off, those who have been able to hold onto their jobs through this find themselves with more money in hand, since they can't go out as much to spend it.
People are no longer picking up coffee on the way to work, using gas in their cars, going out to eat, seeing movies, or visiting theme parks and entertainment centers. This lets them have more disposable income, and with that comes the treat-yo-self mentality.
However, thanks to this companies like JM Smuckers (NYSE: SJM), Tyson Foods (NYSE: TSN) and Kraft Heinz (NASDAQ: KHC) have been pulling back on promotions, and upping their prices, too. Even egg prices have gone up since restaurants aren't buying the way the used to, and production is forced to make more cartons for home purchases.
Unfortunately, not all pandemic spending habits are simply shifting. Now that the additional COVID-19 $600 in unemployment has stopped, there will likely come a second change in spending as money runs out. Experts are predicting recession styled spending as people cut back. Many are still without jobs, and if unemployment can no longer cover them or they aren't sure when their next paycheck is coming in. With all of this coming down at once, there may be a return to the kind of spending that the economy saw at the beginning of the pandemic.