Retailers, Broadlines UBS Evidence Lab inside: Have Consumers Found A New Normal? - Update in Slides

While the portion of consumers that were spending less had been on the decline since April, this trend stopped in late June and we have seen a plateauing of trends since then. Respondents who report spending more remains low.

04 Aug 2020

How has the coronavirus outbreak affected your spending overall?

Source: UBS Evidence Lab(>Access Dataset)

This line chart illustrates how respondents answered the survey question, "How has the coronavirus outbreak affected your spending overall?"

Mobility trends have largely stabilized

A variety of datasets indicate that the US Consumer has settled into steady patterns as of late, but various vulnerabilities lie ahead. Importantly, UBS Evidence Lab US Retailer Foot Traffic Regional Exposure data indicates that mobility trends have largely plateaued across trade areas during the month of July, after experiencing steady improvements since mid-April. Since 7/12, and as of the most recent reading on 7/27, Retail & Recreation mobility trends were down -15% nationwide. While well above the trough of -46% on 4/13, the levelling off is likely due to the fading tailwinds of government stimulus as well as the recent rise in the spread of the virus in certain geographies. Unemployment distributions since April have totaled $367b (vs. $8b in '19). Overall, we think foot traffic to retail stores will face pressure for the foreseeable future.

Survey shows consumers remain more pessimistic than optimistic about future

The UBS Evidence Lab's reopening consumer survey shows that consumers’ confidence about the future state of the economy is softening. Specifically, the gap between respondents who believe that the economy will get worse over the next 6 months (45%, up 400 bps from last week) and those who believe that the economy will get better over the same period (33%, down -200 bps from last week) is at its widest point since the beginning of the survey. Further, while consumer comfort in shopping in stores regressed 200 bps from last week to 45%. Finally, the number of respondents indicating they are spending less decreased 600 bps from last week to 42%. Should another round of stimulus checks be distributed, sporting goods and auto part stores tend to see wallet share gains in the past after checks go out.

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