The bulk buying trend
As the threat of the pandemic began to materialise Australian visited supermarkets in large numbers, stockpiling toilet paper and other essential items.
“Although consumers were assured supermarkets would remain open, our region wasn’t immune to the bulk-buying that gripped most of Australia and that was an interesting trend to watch,” says Cudmore.
“When COVID first hit, we had a 60% increase in supermarket spend, but that’s now down to 40% which shows us that consumers are becoming more comfortable and they’re seeing supplies on the shelves, realising that they’re not going to be left high and dry. There was also a 26% rise in pharmacy spend, as consumers stocked up on cold and flu medicine.”
Feathering the nest
“As consumers stayed home during the pandemic, spending shifted significantly towards items that help us ‘feather our nest’,” said Cudmore.
“Department stores saw a 66% jump in spend, while retail spend on electronics goods soared by 111% as consumers purchased laptops, iPads and mobile phones in order to socialise and stay in touch with friends and family,” he explained. “And we saw a spike in customer spending on appliances such as freezers and home office equipment, as many people shifted to working remotely.”
Stores in the home improvement category, such as Bunnings, have also been big winners throughout the COVID period. “Home improvement spend has increased by 71%, which suggests all those home projects we never get around to doing are actually being ticked off for a change,” said Cudmore.
The other interesting spikes were direct marketing (up 74%) and subscriptions to wholesale clubs offering discounted goods or bulk buys. “This is normally not a strong category in our reports but spend during the COVID period for websites like Catch.com.au was up 65%,” said Cudmore.
Interestingly, spend on streaming services across the Hunter region in particular remained steady. “That could be a reflection of our customers probably already having subscriptions to Netflix, Stan, those other types of streaming services; our data shows that spend on these just remained a constant.”
Industries most impacted
Travel was one of Newcastle Permanent’s customers’ strongest categories in 2019, but post-COVID this category has seen a sharp decline. “Travel is down domestically with a 30% decrease in car rentals, 80% decrease in airline bookings – which includes international flight bookings too – and an 80% decrease in payments to travel agents,” says Cudmore.
And, although many restaurants have pivoted to offer takeaway food services during the pandemic, there have also been wide closures of eateries and a decrease within the hospitality category. The entertainment category has flat-lined, and surprisingly online clothes shopping has suffered a dip.
“Even though clothing stores shut, the majority had shifted to an online model and the uptake of apparel spend wasn’t quite as high as we’d anticipated,” said Cudmore.
The beauty industry sharply dropped off, as did professional services – lawyers, accountants and financial advisors. “The transportation category also dropped off, with a 76% decrease in public transport spend and a 26% decrease in spend on fuel,” he added, “due to the fact that people were working from home and commuting less. But I anticipate we’ll start to see an upward trend in those areas now that restrictions starting to ease.”