Consumers are still scaling back on their spending, but they are eager to head back to hair salons and physical stores as coronavirus-inspired restrictions on movement start to ease, according to a new survey.
Forty-four percent of consumers surveyed by 451 Research, an offering of S&P Global Market Intelligence, said they plan to start shopping at retail stores as soon as state and local restrictions on movement and nonessential businesses ease. They are even more eager to get a hair cut or a massage. "The Voice of the Customer Macroeconomic Outlook, Consumer Spending" survey found that 55% of respondents would immediately spend money at "personal services" establishments like hair salons and massage parlors.
Consumers appear less enthusiastic about eating in restaurants. Just 31% of respondents anticipated dining in at restaurants immediately, with 40% indicating that they would hold off in the short term but return within three months. Pluralities said they would wait more than three months before resuming expensive, long-distance travel activities, with 43% putting off travel by air and 37% refraining to stay at a hotel, 451 found.
The survey is based on responses from 1,250 people collected April 30-May 18, primarily in the U.S. and Canada. The survey's respondents tended to have higher incomes, with about half reporting that they made $120,000 annually.
Retailers from Walmart Inc. to Dollar General Corp. saw explosive demand for delivery and pickup services, especially for food and consumables, as consumers avoided shopping in person in March and April. "These digital experiences have had some hiccups," said Sheryl Kingstone, research vice president, customer experience and commerce at 451. The survey suggests that a group of customers "still craves the physical aspect of in-store shopping," she added.
Broadly, 67% of survey respondents are planning to pull back their spending over the next 90 days compared with the same period in 2019, down from 75% in April. Those who planned to spend less cited staying at home due to the pandemic as their top reason.
The results come just after the U.S. Department of Commerce said May 29 that consumer spending fell 13.6% in April — its most significant monthly drop on record. In March, consumer expenditures fell 6.9%.
At the same time, the savings rate in April rose to 33%, up from 13.1% in March, signaling that many consumers were holding on to more of their money instead of spending it.
Grocers, food manufacturers and other companies that make and sell consumable products have seen their sales jump in recent weeks thanks to the pandemic. Still, sales have taken a hit in discretionary categories, such as apparel, as nonessential businesses shut their doors.
Many retailers, including department store Macy's Inc. and off-price retailer The TJX Cos. Inc., have begun reopening their stores in phases. However, analysts expect sales to ramp up faster at retailers such as TJX that cater to more budget-conscious consumers. Macy's said May 21 that sales at stores that had reopened in May were down 50%, while TJX said the same day that sales at its outlets were above levels for the same period in 2019.