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Q1 2023 State of Spend

6 minute read

COVID’s long-term impact on consumer spending

As the world recovers from the COVID-19 pandemic, some pandemic lifestyle changes like mask-wearing in the U.S. remain common. America’s spending habits, however, are starting to return to pre-pandemic trends. 

After two years of disruption, we took a look back at COVID’s long-term impact and made it the focus of our quarterly State of Spend report. We were curious: Which industries have returned to normal and continue to grow, and which still suffer? Which became disruptors? And is inflation affecting buying patterns?

Cardlytics powers digital advertising for banks and financial partners, and has insight into one of every two credit card swipes in the U.S. We share this Purchase Intelligence of where, when and how consumers are shopping to help marketers identify opportunities to reach people with relevant ads. Here are some of the most compelling findings from consumer spending from 2019 through 2022.

Inflation persists

When looking at overall spending and transactions last year, a 5% year-over-year (YoY) increase in total spending occurred from 2021 to 2022 but there was only a 1% increase in the number of transactions, a key indicator of inflation. What’s more, when comparing 2022 to before the pandemic in 2019, we saw a 24% increase in household spending but only a 4% increase in transactions. Consumers are making relatively fewer, more expensive purchases. Despite inflation, and in part fueled by inflation, consumer spending in the United States continues to rise. So, how are people using their discretionary funds? 

Office Supplies sales thrive with work-from-home policies

A deeper look shows how COVID has affected consumer spending specific categories — for better or worse. Office Supplies, for example, had steady growth throughout 2020 as people scrambled to equip home offices and stay productive during lockdowns. Then as 2021 set in with Delta and other COVID variants, sales of office essentials continued to grow strong. 

In 2022, as COVID subsided, and return-to-office policies were implemented — or people had their home offices fully set up — Office Supply sales dropped 32% versus 2021. Spend and transaction volumes of Office Supplies show that people are making more frequent, lower-dollar purchases, with transaction volumes up 15% versus 2019, but sales up only 2%.

Restaurant Delivery is no longer just pizza delivery

One standout category skyrocketed and was transformed by COVID: Restaurant Delivery. The category saw unprecedented growth and arguably a decade worth of technological innovation in a matter of months. 

Restaurant Delivery purchases jumped 97% YoY from 2019-2020, with an overall 184% growth in 2022 versus 2019. Although the category began to plateau in 2022 as restaurants reopened, deliveries didn’t decrease. With similar increases in both spend and transaction volume, both purchase amounts and frequency of Restaurant Delivery continue to grow.  

Travel dips but recovers; Entertainment stays steady

Several categories that have been faltering are showing strong signs of recovery. To no one’s surprise, the onset of COVID hammered Travel spending most of all. Yet in 2022, Travel and Entertainment enjoyed a recovery, with spending up 27% from the previous year. Airlines have nearly recovered to the state they were in 2019. Spending is up 4% from 2019 to 2022; however, transaction volume is down 10%. There is lower occupancy, but everything is costing more. 

Categories like Concerts, Theater, Sporting Events, and Tickets are holding relatively steady on pricing, as both the number of transactions and dollars spent show that this industry is beginning to thrive again. Entertainment spending also continues to rise quarter by quarter, as do offer activation rates and ad campaign spends. 

Canine company, DIY food, and outdoor adventure

Our pandemic purchases reflected our adoption of millions of dogs and other pets, with a 51% increase in Pet spending from 2019 to 2022. Also, as lockdowns went into effect in the spring of 2020 to slow the spread of the coronavirus and reduce stress, reports emerged of a global gardening boom, with plants, flowers, vegetables and herbs sprouting in backyards and on balconies. Our data backs up the narrative: there was a 34% increase in Home and Garden spending from 2019 to 2022. We also ventured outdoors for safe recreation and fresh air, with a 33% increase in spending on Sporting & Outdoor Goods during the same period. 

How do we know all this?

We have a “whole wallet” view into consumer purchase behavior, with insights into one out of every two credit card swipes in the U.S. Cardlytics offers a brand-safe, fraud-free advertising platform inside our financial institution partners’ digital channels. That means we can predict future shopping preferences using past purchase behavior. Our insights help brands reach people and positively influence their purchase decisions with relevant ads that reward them with cash back, frictionlessly.

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