Watching, waiting, and even wincing at what could come next have been the common reactions over the last six months as the novel coronavirus swept the world and our nation by storm. As shutdowns, regulations and mandates were imposed in the name of public safety many, within our business community were left scratching their heads and trying to map what is to come. The first two quarters of 2020 show that one thing is for certain – the coronavirus has impacted the way consumers are spending and planning for the future.
We can see the changes based on discretionary spending behavior which provides insight into the level of consumer confidence. Examples of discretionary purchases are apparel, entertainment, leisure, and automobiles. During the onset of the coronavirus pandemic, retail spending in Bossier Parish dipped by 14 percent from the first quarter to the second quarter of the year. While some of the decline in sales volume can be attributed to the business regulations in place, the spending decline was also accompanied by a rise in unemployment which surged over 13 percent for the Shreveport-Bossier MSA at its highest in April 2020. Consumer intent of essential purchases are staying strong but do show fluctuations based on the number of cases reported.
According to a consumer sentiment survey conducted by McKinsey and Company, 68 percent of Americans are not engaging in out of home activity and are waiting to see what is in store for public safety as restrictions are lifted. This sentiment could last more than six months as more Americans are getting comfortable with what some experts are calling “homebody economics”. This is leading to more home-based purchases such as home office furniture and home exercise equipment.
Changes in how goods and services are purchased are also shifting. Consumers are showing a preference for online shopping while e-commerce sites fight for sales during the digital decision-making process. These factors are changing brand loyalty and even store loyalty. Locally, many brick and mortar stores have adjusted to offer curbside service and online ordering in lieu of in person interactions. This is also an important part of pivoting to meet the needs of customers as they want to feel safe while shopping and participating in the economy.
As restrictions ease and we settle into Phase III, we can expect to see a rebound in some areas important to or regional economy. Tourism and travel for example were negatively impacted by the pandemic. Looking at the local casino numbers alone, you can see revenue increased in the region at all gaming properties, and some are up in admissions over one hundred percent since regulations have eased. Hotel/ motel revenue in Bossier was up 17 percent from June to July 2020. Our market will likely sustain an uptick in hotel/ motel sales due to the extended summer many experienced with a delayed start to the school year as well as the recent natural disaster experienced in the southern part of the state brought on by Hurricane Laura.
Looking ahead, it is hard to predict what is in store for local and national economic stability. The few numbers we have for comparison from quarter 1 to quarter 2 of this year do point to a negative fluctuation in consumer confidence as it relates to the number of coronavirus case counts. As we settle into Phase III it will likely bring about continued increases in sales volume and economic activity, along with a decrease in unemployment which is a boost as we move into the holiday shopping season.