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State of Spend 11 Year End Spend Overview: Home Cooking Heats Up while Black Friday Chills Out

*All data is for week ending 12/2/2020, unless otherwise indicated. 

Who else is ready for 2021? As we close the year, 2020 keeps rearing its ugly head as virus cases surge around the country. With it, spend is regressing to where we were earlier in the pandemic. For the week of December 2, we saw overall spend down -3.4% week-over-week (WoW) dropping it to –10.5% year-over year (YoY), in line with where we were back in May.  

Over the last few weeks, we’ve been following a trend in our Recovery Leading Indicator (RLI), which tracks discretionary spend, such as in-restaurant dining and salons. RLI declined to -24% YoY driven primarily by decreases in restaurant and in-store retail spend. These RLI categories are still struggling to get back to pre-pandemic levels as consumers continue to move their spend to alternative channels.  

Bottom line: we’re seeing a shift in consumer behavior. But which categories are seeing the biggest changes? 

Dine Out or Home Cooked? 

When lockdowns began in March, there was a clear correlation between grocery and restaurant spend, with grocery increasing as restaurant decreased. As lockdowns were lifted, the correlation became less obvious as restaurant sales rebounded quite quickly, while grocery sales started to slowly decline.  

For the week of December 2, both restaurant (-23.5%) and restaurant delivery (-17.4%) saw declines WoW. While restaurant delivery was up YoY, consistent with previous week trends (~118% Y/Y), full-service restaurant was down -36% YoY, indicating many people switched from eating in restaurants to eating at home. Overall grocery was only up 0.2% YoY, indicating spend trends were exactly in line. 

How About Hoarding? 

While grocery sales were up 5-8% in the months of October and November, this is significantly lower than the 12-20% (and up to 83%) YoY growth that we saw during the peak of COVID lockdowns.  In conjunction, we are seeing a basket size increase of 16-21% the past couple of weeks, but this is again down from the 20-25% increase in basket size we saw over the summer.  This shows that while we are not seeing the hoarding behaviors come back, consumers are still looking to the grocery category to replace the meals they aren’t buying at restaurants.  

Black Friday Exhaustion 

Too many sales? This year, that may be the case as holiday spend is up nearly 10% YoY, but Black Friday spend was down –22% (in the 48 hours following Thanksgiving), implying a bit of Black Friday exhaustion this year. This is likely due to the longer runway we had for the holiday shopping season, beginning with Prime Day in October. Additional store closures on Thanksgiving Day also played a role in the decrease. Spend is shifting online as well, with ~6 pts of spend share moving online this holiday, with online brick-and-mortars winning more of that share than online-only retailers. 

As we close out 2020 and look ahead to 2021, the New Year promises to reveal new spend trends as consumers settle into a post-pandemic life with different values, habits, and behaviors. Our insights into one in two card swipes in the U.S. allow us to help marketers navigate and respond to these changes and quickly adapt as they become lasting behaviors in 2021 and beyond. 

With an advertising platform that reaches more than 160 million bank customers, Cardlytics can help marketers create targeted campaigns that answer:   

• When and where are customers starting to make in-store purchases? 

• How quickly am I gaining or losing share versus my industry? 

• How is my eCommerce channel performing against my category?  

• Are my newly acquired customers likely to churn?  

Contact us today for an analysis and a campaign strategy customized for your brand. 

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