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The Year in $$$: Where Our Money Went

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IgorVetushko on DepositPhotos

When a Washington state resident became the first confirmed case of COVID-19 in the United States on Jan. 21, no one could have predicted the persistence of the subsequent lockdowns and quarantine across the nation. Over the past year, our lives have changed dramatically: spending months in lockdown, connecting with friends virtually and working from home. Our spending habits have changed, too. Where did our money go?

The essentials 

During the lockdown, sales for household cleaning products and disinfectants skyrocketed. Lysol brand products were up over 100%, while sales for aerosol disinfectants, soap products and dishwasher detergents continue to climb. Personal health items such as vitamins and supplements saw growth of about 50% in the first half of the fiscal year. 

Celine Pannuti, head of European staples and beverage research at J.P. Morgan, said, “Overall, consumers want very high standards of hygiene, so the reality is that cleaning and disinfectant products are going to be in demand for quite some time to come.” 

Unsurprisingly, at-home coffee products also saw a quarantine boost, with 42% of the U.S. labor force working from home. Coffee-Mate, Nescafé and Starbucks grew at double-digit rates

The online boom 

Consumers spent over $861 billion online last year. E-commerce surged as a result of the pandemic. 

“With everyone stuck at home, there has been a lot more focus on online systems, advertising and delivery from the corporate side, and this will reinforce the push to shopping online,” said Pannuti.

Supporting neighbors and the community 

While stuck in their homes, consumers still wanted to reach out to their communities. 

“Even before the pandemic, people wanted more distinctiveness and were starting to seek out locally-sourced products; the pandemic has just accelerated that trend,” said Oliver Wright, consumer goods and services global lead at Accenture. “More people are seeing [the toll that the pandemic has taken on local bars and restaurants] and are collectively rallying together to show support for them with their pocketbooks.”

Personal growth and development 

During the quarantine, people embraced new hobbies and a “do-it-yourself” mentality. According to a recent Nielsen report, “Companies that can intelligently drive the discovery and learning of DIY behaviors will succeed in empathizing with current consumer interest in creative, cost-conscious and safe consumption.” For example, sales of Hello Fresh meal kits grew upwards of 120%, providing homebound cooks with ingredients and recipes to make dinner at home. Personal grooming and pet supplies saw almost 20% growth when compared to June of 2019. 

Stimulus spending

The majority of adults who received a federal stimulus check said that they used it on household expenses. According to the Household Pulse Survey, about 80% of federal aid recipients spent the money on food, rent or utilities. Less than 10% splurged on electronics or recreational goods. Others paid down debt or padded savings.

With the U.S. on the verge of another stimulus package, COVID’s impact on our spending habits is still evolving. There will certainly be new money trends in the coming months. 

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