A Different Degree of Wealth

How COVID-19 Has Changed Consumer Behavior and the Future of Retail

U.S. retail sales suffered in the spring of 2020 due to safety concerns, government-mandated lockdowns, and economic uncertainty wrought by the coronavirus pandemic. Sales — including purchases at stores, restaurants, and online — plunged from $483.95 billion in March to $412.77 billion in April, a record 16.4% drop.1

Fortunately, retail sales rebounded sharply after the economy began to reopen in May, matched pre-pandemic levels in June ($529.96 billion), and continued to rise steadily from July through September. But sales softened in October, ticking up just 0.3% to $553.33 billion.2

The arrival of an effective vaccine could inspire some holiday cheer, though it probably won’t be widely available until next spring.3 Until then, consumers will likely spend more time at home.

U.S. consumer spending accounts for about two-thirds of all economic activity, so it’s good news that many businesses and consumers have adapted quickly to the new normal created by the pandemic.4 Here’s a look at recent changes in consumer behavior, the state of the retail industry, and what these trends could mean for the broader U.S. economy.

Stay-at-home spending shifts
Some workers with stable incomes have been able to save money they would normally spend on transportation, gym memberships, restaurant meals, and expensive “experiences” such as vacations, concerts, sporting events, and other live shows. On the other hand, many households are spending more on home improvements, household goods, fitness equipment, and other lifestyle purchases that make sheltering in place more tolerable.5

For example, huge demand for bicycles resulted in surprising shortages.6 And with offices closed and most special events cancelled or postponed, a preference for casual and comfortable clothing has decimated consumer demand for more formal attire like business suits and dresses.7

A swift expansion of e-commerce was also unleashed. New online habits were created in the first three months of the pandemic, accelerating the adoption of digital technologies that might have taken 10 years to achieve otherwise.8

When lockdowns and social distancing measures were put in place, many consumers were compelled to shop online and use other digital services (e.g., video chat, virtual doctor visits, and online classes) for the first time. Surveys suggest that a vast majority of new users found online services to be useful and convenient; many said they will continue to use them permanently.9

But anxious consumers have also been boosting their savings. The personal saving rate — the percentage of disposable income that people don’t spend — hit a record 33.6% in April before falling to 14.1% in August, far above February’s 8.3% rate.10 When consumers prioritize saving, it may help individual households build financial stability and prepare for retirement, but it can also hold back the nation’s economic growth.

Traditional retailers on the ropes
Big-box retailers that sell groceries and other goods in one place and home-improvement stores were deemed “essential” in the spring. Regardless of local virus conditions, these businesses have remained open for a steady flow of customers eager to stock up on food and other necessities. As a result, they have generally been able to book healthy profits.11

Meanwhile, temporary closures, capacity limits, and a drop-off in overall customer traffic have taken a toll on nonessential retailers that couldn’t offer a convenient online shopping experience with home or curbside delivery. The pandemic may land the blow that knocks out some familiar brick-and-mortar retailers, many of which were already buckling under excessive debt and fierce competition from e-commerce giants.

Retail bankruptcies and store closings are on track for a record year in 2020. By mid-August, 29 U.S. retailers had filed for Chapter 11 protection, including several long-standing department-store chains. More than 10,000 permanent store closings have already been announced in 2020, vacating roughly 130 million square feet of physical retail space.12

A holiday season like no other
Higher unemployment and wage cuts might have had a more severe impact on consumer spending from March to October were it not for the expanded unemployment benefits and stimulus checks delivered to consumers by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

More than 11 million U.S. workers were still unemployed in October, before a nationwide surge in virus cases and hospitalizations sparked a new round of business restrictions and closures in mid-November.13-14 CARES Act provisions that offer financial support for affected consumers and small businesses expire by the end of December.

Holiday sales figures are often considered an economic barometer, reflecting consumer confidence and funds for discretionary spending. In 2019, holiday spending in November and December rose 4.1% over 2018, suggesting that economic growth was picking up steam.15 But holiday shoppers were blissfully unaware that a pandemic was on its way.

Black Friday holiday deals are designed to create a frenzy and lure throngs of shoppers into stores. But retailers seemed to agree that a different approach was needed in 2020: Promotions were offered online and earlier; store hours were shortened and capacity was limited; and unlike in past years, most stores stayed closed on Thanksgiving.

The prospects for holiday retail sales in 2020 are murky, but consumers are expected to purchase more gifts online than ever before — and possibly too many for shipments to be delivered on time.

Merry Christmas!

Source: Broadridge Advisors

Golf Tip of the Week

Eliminate the Big Tee Shot Miss: Part Four

We have talked about vertical gear effect, which can change your launch conditions, but what about horizontal gear effect, which can make your misses much worse if you hit the wrong part of the face?

Let me explain: most manufacturers have built gear effect into the toe and the heel of the club, which means that a heeled tee shot will tend to slice and a toed tee shot will tend to hook. Couple this with a funky path and face combination, and you have the recipe for the big miss.

If your path is left of the target, you hit the ball on the heel, and your face at impact is pointing right of the target, then you have a ball that is going right to right with the blinker on! Why? Because you have both the face and path, plus the gear effect, working against you.

You must focus on hitting the ball in the center of the face, no matter what the path. This is a fundamental that must be focused on as much as anything else.

Tip adapted from GolfTipsMag.comi

Recipe of the Week

Spinach and Ricotta Grilled Cheese

[2 servings]


  • 1 clove garlic, crushed
  • 1/3 cup ricotta cheese
  • 1/4 cup frozen chopped spinach, thawed
  • 2 tablespoons grated parmesan cheese
  • Sea salt and cracked pepper, to taste
  • Dried Italian mixed herbs, to taste (Oregano and basil mix)
  • 1/4 cup grated light mozzarella cheese (or fresh mozzarella, thinly sliced)
  • 4 thick slices sourdough bread
  • 1 tablespoon butter (light or reduced-fat spread)
  • 1/2 cup of your favorite pasta sauce


  1. In a medium sized pan/skillet, fry the garlic in a small amount of olive oil (or cooking oil spray), until just fragrant (about 30-60 seconds) over medium-high heat. Remove from heat; add the garlic to a small bowl; set pan/skillet aside.
  2. Add the ricotta cheese, spinach, parmesan cheese, salt/pepper and Italian herbs to the pan-fried garlic and mix until well combined.
  3. Spread one side of each slice of bread with butter. Divide the ricotta mixture in half and spread it on the un-buttered sides of two slices of bread; divide the mozzarella cheese in half and add it over the ricotta mixture; top with remaining bread – buttered side up (to create a sandwich).
  4. Return the pan/skillet to the stove over medium heat and place the sandwiches in the pan. Cook, turning once, until the cheese has melted and both sides are golden brown (about 3-4 minutes per side).
  5. Sprinkle with extra Italian herbs and serve with the pasta sauce (optional).

Recipe adapted from Cafedelites.comii

Health Tip of the Week

Stressed Out? Take a Breather with These Meditation Apps

Several apps to download to your smartphone or tablet focus solely on mindfulness and meditation, each with a slightly different approach. Most are easy to use, even for beginners, and in many cases they’re free to start.

Even if you take just a short time-out each day to hit the reset button or to help unwind for a better night’s sleep, consider these picks, available in both the App Store for iOS devices such as iPhone and iPad and Google Play for Android.

  • Calm: One of the most popular apps in this space, Calm is a meditation and mindfulness app with guided sessions from 3 to 25 minutes long. It has content designed for beginners as well as intermediate and advanced users, including seven- and 21-day programs.
  • Headspace: Headspace features a clean and easy-to-use interface, and offers a free beginner series called “Take10” — 10 sessions, each 10 minutes long, over 10 days — using proven meditation and mindfulness techniques that could help you clear your head, enjoy greater happiness, reduce stress and sleep better.
  • Simple Habit: “Built for busy people,” the on-demand mindfulness and meditation platform dishes up short lessons and features more than 1,000 sessions. Mindfulness teachers from around the world — including former monks — guide the sessions.
  • Ten Percent Happier: Designed for “fidgety skeptics,” Ten Percent Happier offers clear and simple meditation lessons — with video. The app features quick meditations, which you can do whenever you have a spare moment, from many respected teachers.

Tip adapted from AARP.comiii

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1) The Wall Street Journal, May 15, 2020
2) U.S. Census Bureau, 2020
3) The New York Times, November 17, 2020
4) U.S. Bureau of Economic Analysis, 2020
5) The Wall Street Journal, November 17, 2020
6) The New York Times, June 18, 2020
7) The Wall Street Journal, August 27, 2020
8-9) The Wall Street Journal, November 15, 2020
10) The Wall Street Journal, October 25, 2020
11) The Wall Street Journal, November 18, 2020
12) The Wall Street Journal, September 29, 2020
13) U.S. Bureau of Labor Statistics, 2020
14, 16) Associated Press, November 11 and 17, 2020
15) National Retail Federation, 2020


Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

The articles and opinions expressed in this newsletter were gathered from a variety of sources but are reviewed by Ballentine Capital Advisors prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice. In all cases, please contact your investment professional before making any investment choices.

Securities through Triad Advisors, LLC, Member FINRA/SIPC. Advisory services through Ballentine Capital Advisors, Inc. Triad Advisors and Ballentine Capital Advisors are not affiliated entities.


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