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Monday, October 25, 2021

Pandemic Lifts Average Retail Spending Per Shopping Occasion

The COVID-19 pandemic has led to an increase in the average amount U.S. consumers spend on each shopping occasion, whether it is a trip to a physical store or a visit to an online shopping site.

Since reaching $34 in March of 2020, average shopping occasion spending has remained elevated at or above that amount through July 2021, according to The NPD Group. This increase is due partially to a general shift toward online purchasing, where average selling prices (ASPs) and the amount spent on each transaction already tended to be higher.

However, the number of shopping occasions per week still falls short of 2019 levels, indicating the sales lift primarily is caused by an increase in stock-up purchasing behavior, as consumers buy more on each occasion.

“Fewer shopping trips to limit in-person contact at retail stores, combined with supply-chain challenges making fewer products available, means consumers are more willing to spend more now to get the products they need,” said Marshal Cohen, retail chief industry advisor for NPD. “This dynamic alters the traditional cadence of product seasonality and creates less price sensitivity.”

In each of the 12 months since March 2020, the average amount spent per shopping occasion has been between 13 percent and 29 percent higher than the same month in the prior year. Those new spending levels have held relatively steady since March 2021.

Grocery and drug stores, warehouse clubs, hardware and farm stores, and mass merchants have enjoyed the strongest growth in spending per-shopping occasion since the start of the pandemic, across the combined in-store and online retail landscape. The amount spent per shopping occasion through July of this year at each channel averaged at least 20 percent higher than 2019 levels. Warehouse clubs, and hardware and farm stores are two channels that experienced an increase in combined in-store and online shopping visits, but their overall gains still pale in comparison to pure-play online retailers which have increased shopping visits 49% compared to 2019.

“Leading into the holiday shopping season, we can expect to see consumers spending more for better products, with fewer items under the tree,” added Cohen. “The evolving pandemic lifestyle is already influencing what consumers are buying. Layer on reduced in-store shopping frequency, and the continued strength of online shopping, and the critical role of impulse shopping will remain muffled.”

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