Spend

"Revenge Spending” has arrived: retail sales surge as the economy glows up

Friday, April 16, 2021 by Robinhood Snacks | Disclosures
_"Revenge (spending) is sweet"              [kali9/E+ via Getty Images]_

"Revenge (spending) is sweet" [kali9/E+ via Getty Images]

Went stimulus shopping... Retail sales surged in March, soaring ~10% from February — the largest jump since May of last year. As $1.4K stimulus checks hit bank accounts and vax shots hit arms, Americans hit stores and restaurants. The biggest pops in consumer spending were in pandemic-pummeled sectors:

  • Risers: Restaurant sales were up 13%, while clothing store sales soared 18%. Sporting goods and hobby stores were up a whopping 23%.
  • Fallers: Grocery sales barely budged from February, and actually fell 14% from March last year. Sales at online retailers jumped only 6%.

Slim fit, revenge fit... After a year of saving up and holding back, Americans are "revenge spending" on pre-pandemic pleasures. Think: non-stretchy clothes, non-canned cocktails, and non-Zoom experiences. A few examples...

  • Bank of America: In March, debit and credit card spending jumped the most for plane tickets (up ~40%) and clothing (up ~20%).
  • American Eagle's quarterly sales are on pace to top $1B, thanks to a surge in sales of jeans and dressier tops.
  • Pepsi expects sales of oatmeal, box pancakes, and other packaged foods to slow as we eat out more (less Quaker, more IHOP).
  • Delta's passenger revenue jumped 50% in March from February, as we traveled outside the Netflix catalog.
THE TAKEAWAY

The US economy has come a long way.... in a short time. April 2020 seems like eons ago. But just 365 days ago we had: a world-halting pandemic, 22M unemployed, and zero vaccines. We're far from coming full circle, but this March rebound feels like a return to “normalcy.” US consumer confidence is at its highest level since the pandemic began. Nearly 1M jobs were added last month — the biggest gain since August. Now, consumer spending is expected to help propel US economic growth to +6.4% this year — its best rate in decades.