Markets

How U.S. Consumers are Spending Differently During COVID-19

Published

8 months ago

May 21, 2020

In 2019, nearly 70% of U.S. GDP was driven by personal consumption.

However, in the first quarter of 2020, the COVID-19 pandemic has initiated a transformation of consumer spending trends as we know them.

Consumer Spending in Charts

By leveraging new data from analytics platform 1010Data, today’s infographic dives into the credit and debit card spending of five million U.S. consumers over the past few months.

Let’s see how their spending habits have evolved over that short timeframe:

How U.S. Consumers are Spending Differently During COVID-19

The above data on consumer spending, which comes from 1010Data and powered by AI platform Exabel, is broken into 18 different categories:

General Merchandise & Grocery: Big Box, Pharmacy, Wholesale Club, Grocery
Retail: Apparel, Office Supplies, Pet Supplies
Restaurant: Casual dining, Fast casual, Fast food, Fine dining
Food Delivery: Food delivery, Grocery Delivery, Meal/Snack kit
Travel: Airline, Car rental, Cruise, Hotel

It’s no surprise that COVID-19 has consumers cutting back on most of their purchases, but that doesn’t mean that specific categories don’t benefit from changes in consumer habits.

Consumer Spending Changes By Category

The onset of changing consumer behavior can be observed from February 25, 2020, when compared year-over-year (YoY).

As of May 12, 2020, combined spending in all categories dropped by almost 30% YoY. Here’s how that shakes out across the different categories, across two months.

General Merchandise & Grocery

This segment saw a sharp spike in initial spending, as Americans scrambled to stockpile on non-perishable food, hand sanitizer, and toilet paper from Big Box stores like Walmart, or Wholesale Clubs like Costco.

In particular, spending on groceries reached a YoY increase of 97.1% on March 18, 2020. However, these sudden panic-buying urges leveled out by the start of April.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Big Box	+14.2%	-1.5%	-15.7%
Grocery	+1.0%	+9.4%	+8.4%
Pharmacy	-3.6%	-23.8%	-20.2%
Wholesale Club	+13.0%	+2.6%	-10.4%

Pharmaceutical purchases dropped the most in this segment, possibly as individuals cut back on their healthcare expenditures during this time. In fact, in an April 2020 McKinsey survey of physicians, 80% reported a decline in patient volumes.

Retail

With less foot traffic in malls and entire stores forced to close, sales of apparel plummeted both in physical locations and over e-commerce platforms.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Apparel	-5.6%	-51.9%	-46.3%
Office Supplies	-8.9%	-2.8%	+6.1%
Pet Supplies	+2.7%	-18.5%	-21.2%

Interestingly, sales of office supplies rose as many pivoted to working from home. Many parents also likely required more of these resources to home-school their children.

Restaurant

The food and beverage industry has been hard-hit by COVID-19. While many businesses turned to delivery services to stay afloat, those in fine dining were less able to rely on such a shift, and spiraled by 88.2% by May 5, 2020, year-over-year.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Change	Overall Change
Casual Dining	-2.7%	-64.9%	-62.2%
Fast Casual	4.2%	-29.6%	-33.8%
Fast Food	2.0%	-20.9%	-22.9%
Fine Dining	-18.6%	-88.2%	-69.6%

Applebees or Olive Garden exemplify casual dining, while Panera or Chipotle characterize fast casual.

Food Delivery

Meanwhile, many consumers also shifted from eating out to home cooking. As a result, grocery delivery services jumped by over five-fold—with consumers spending a whopping 558.4% more at its April 19, 2020 peak compared to last year.

	Feb. 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Food Delivery	+18.8%	+67.1%	+48.3%
Grocery Delivery	+23.0%	+419.7%	+396.7%
Meal/ Snack Kit	+7.0%	-5.9%	-12.9%

Food delivery services are also in high demand, with Doordash seeing the highest growth in U.S. users than any other food delivery app in April.

Travel

While all travel categories experienced an immense decline, cruises suffered the worst blow by far, down by 87.0% in YoY spending since near the start of the pandemic.

	Feb 25, 2020 YoY Spending	May 5, 2020 YoY Spending	Overall Change
Airline	-7.7%	-99.1%	-91.4%
Car Rental	-6.3%	-86.0%	-79.7%
Cruise	-18.7%	-105.7%	-87.0%
Hotel	-7.0%	-85.9%	-78.9%

Airlines have also come to a halt, nosediving by 91.4% in a 10-week span. In fact, governments worldwide have pooled together nearly $85 billion in an attempt to bail the industry out.

Hope on the Horizon?

Consumer spending offers a pulse of the economy’s health. These sharp drops in consumer spending fall in line with the steep decline in consumer confidence.

In fact, consumer confidence has eroded even more intensely than the stock market’s performance this quarter, as observed when the Index of Consumer Sentiment (ICS) is compared to the S&P 500 Index.

Consumer Sentiment Index

Many investors dumped their stocks as the coronavirus hit, but consumers tightened their purse strings even more. Yet, as the chart also shows, both the stock market and consumer sentiment are slowly but surely on the mend since April.

As the stay-at-home curtain cautiously begins to lift in the U.S., there may yet be hope for economic recovery on the horizon.

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Technology

The World’s Top Car Manufacturers by Market Capitalization

Published

2 hours ago

January 21, 2021

Iman Ghosh

The World’s Top Car Manufacturers by Market Cap

View the high-resolution of the infographic by clicking here.

Ever since Apple and other Big Tech companies hit a market capitalization of $1 trillion, many sectors are revving to follow suit—including the automotive industry.

But among those car brands racing to reach this total valuation, some are closer to the finish line than others. This visualization uses data from Yahoo Finance to rank the world’s top car manufacturers by market capitalization.

What could this spell for the future of the automotive industry?

A special hat-tip to Brandon Knoblauch for compiling the original, regularly-updated spreadsheet.

The World’s Top Car Manufacturers

It’s clear one company is pulling far ahead of the pack. In the competition to clinch this coveted title, Tesla is the undoubted favorite so far.

The electric vehicle (EV) and clean energy company first became the world’s most valuable car manufacturer in June 2020, and shows no signs of slowing its trajectory.

Rank	Company	Market Cap (US$B)	Country
#1	Tesla	$795.8	🇺🇸 U.S.
#2	Toyota	$207.5	🇯🇵 Japan
#3	Volkswagen	$96.7	🇩🇪 Germany
#4	BYD	$92.7	🇨🇳 China
#5	NIO	$89.5	🇨🇳 China
#6	Daimler	$72.8	🇩🇪 Germany
#7	General Motors	$71.3	🇺🇸 U.S.
#8	BMW	$54.2	🇩🇪 Germany
#9	Stellantis	$54.2	🇳🇱 Netherlands
#10	Ferrari	$52.5	🇮🇹 Italy
#11	Honda	$46.9	🇯🇵 Japan
#12	Hyundai	$46.8	🇰🇷 South Korea
#13	SAIC	$45.2	🇨🇳 China
#14	Geely	$39.5	🇨🇳 China
#15	Ford	$39.4	🇺🇸 U.S.
#16	Xpeng	$33.9	🇨🇳 China
#17	Maruti Suzuki	$33.1	🇮🇳 India
#18	Li Auto	$29.5	🇨🇳 China
#19	Suzuki	$23.7	🇯🇵 Japan
#20	Nissan	$20.1	🇯🇵 Japan
#21	Subaru	$15.2	🇯🇵 Japan
#22	Changan	$14.6	🇨🇳 China
#23	Mahindra	$13.9	🇮🇳 India
#24	Renault	$12.0	🇫🇷 France

All data as of January 15, 2021 (9:30AM PST)

Tesla’s competitive advantage comes as a result of its dedicated emphasis on research and development (R&D). In fact, many of its rivals have admitted that Tesla’s electronics far surpass their own—a teardown revealed that its batteries and AI chips are roughly six years ahead of other industry giants such as Toyota and Volkswagen.

The Green Revolution is Underway

The sheer growth of Tesla may spell the inevitability of a green revolution in the industry. Already, many major brands have followed in the company’s tracks, announcing their own ambitious plans to add more EVs to their vehicle line-ups.

Here’s how a selection of car manufacturers are embracing the electric future:

Toyota: Ranked #2

The second-most valuable car manufacturer in the world, Toyota is steadily ramping up its EV output. In 2020, it produced 10,000 EVs and plans to increase this to 30,000 in 2021.

Through this gradual increase, the company hopes to hit an expected target of 500,000 EVs by 2025. Toyota also aims to debut 10 new models internationally to achieve this goal.

Volkswagen: Ranked #3

By 2025, Volkswagen plans to invest $86 billion into digital and EV technologies. Considering the car manufacturer generates the most gross revenue per second of all automakers, it’s no wonder Volkswagen is looking to the future in order to keep such numbers up.

The company is also well-positioned to ride the wave of a potential consumer shift towards EVs in Europe. In response to the region’s strict emissions targets, Volkswagen upped its planned sales proportions for European hybrid and EV sales from 40% to 60% by 2030.

BYD and Nio: Ranked #4-5

China jumped on the electric bandwagon early. Eager to make its mark as a global leader in the emerging technology of lithium ion batteries (an essential component of any EV), the Chinese government handed out billions of dollars in subsidies—fueling the growths of domestic car manufacturers BYD and Nio alike.

BYD gained the interest and attention of its billionaire backer Warren Buffett, while Nio is China’s response to Tesla and an attempt to capture the EV market locally.

General Motors: Ranked #7

Also with a 2025 target year in mind, General Motors is investing $27 billion into electric and fully autonomous vehicles. That’s just the tip of the iceberg, too—the company also hopes to launch 30 new fully electric vehicles by the same year.

One particular factor is giving GM confidence: its new EV battery creations. They will be able to extend the range of its new EVs to 400 miles (644km) on a single charge, at a rate that rivals Tesla’s Model S.

Stellantis: Ranked #9

In a long-anticipated move, Fiat Chrysler and Peugeot S.A. finalized their merger into Stellantis N.V. on January 16, 2021.

With the combined forces and funds of a $52 billion deal, the new Dutch-based car manufacturer hopes to rival bigger brands and race even more quickly towards the electric shift.

Honda: Ranked #11

Speaking of fast-paced races, Honda has decided to bow out of future Formula One (F1) World Championships. As these competitions were usually a way for the company to show off its engineering prowess, the move was a surprising one.

However, there’s a noble reason behind this decision. Honda is choosing instead to focus on its commitment to become carbon neutral by 2050. To do so, it’ll be shifting its financial resources away from F1 and towards R&D into fuel cell vehicle (FCV) and battery EV (BEV) technologies.

Ford: Ranked #15

Ford knows exactly what its fans want. In that regard, its electrification plans begin with its most popular commercial cars, such as the Mustang Mach-E SUV. This is Ford’s major strategy for attracting new EV buyers, part of a larger $11.5 billion investment agenda into EVs through 2022.

While the car’s specs compare to Tesla’s Model Y, its engineers also drew from the iPhone and Netflix to incorporate an infotainment system and driver profiles to create a truly tech-first specimen.

Speeding into the Horizon

As more and more companies enter the racetrack, EV innovation across the entire industry may power the move to lower overall costs, extend the total range of vehicles, and put any other concerns by potential buyers to rest.

While Tesla is currently in the best position to become the first car manufacturer to reach the $1 trillion milestone, how long will it be for the others to catch up?

Energy

The Periodic Table of Commodity Returns (2021 Edition)

Which commodity had the best returns in 2020? From gold to oil, we show how commodity price performance stacks up over the last decade.

Published

2 weeks ago

January 8, 2021

Dorothy Neufeld

The Periodic Table of Commodity Returns (2011-2020)

Being a commodity investor can feel like riding a roller coaster.

Take silver. Typically known for sharp, idiosyncratic price movements, it faced double-digit declines in the first half of the decade, falling over 35% in just 2013 alone. By contrast, it jumped over 47% in 2020. Similarly, oil, corn, and others witnessed either steep declines or rapid gains.

The above graphic from U.S. Global Investors traces 10 years of commodity price performance, highlighting 14 different commodities and their annual ranking over the years.

Commodity Price Performance, From Best to Worst

Which commodities were the top performers in 2020?

The aforementioned silver tripled its returns year-over-year, climbing 47.9% in 2020. In July, the metal actually experienced its strongest month since 1979.

Rank	Commodity	Return (2020)	Return (2019)	Return (2018)
1	Silver	47.9%	15.2%	-8.5%
2	Copper	26.0%	3.4%	-17.5%
3	Palladium	25.9%	54.2%	18.6%
4	Gold	25.1%	18.3%	-1.6%
5	Corn	24.8%	3.4%	6.9%
6	Zinc	19.7%	-9.5%	-24.5%
7	Nickel	18.7%	31.6%	-16.5%
8	Gas	16.0%	-25.5%	-0.4%
9	Wheat	14.6%	11.0%	17.9%
10	Platinum	10.9%	21.5%	-14.5%
11	Aluminum	10.8%	-4.4%	-17.4%
12	Lead	3.3%	-4.7%	-19.2%
13	Coal	-1.3%	-18.0%	-22.2%
14	Oil	-20.5%	34.5%	-24.8%

Along with silver, at least seven other commodities had stronger returns than the S&P 500 in 2020, which closed off the year with 16.3% gains. This included copper (26.0%), palladium (25.9%), gold (25.1%) and corn (24.8%).

Interestingly, copper prices moved in an unconventional pattern compared to gold in 2020. Often, investors rush to gold in uncertain economic climates, while sectors such as construction and manufacturing—which both rely heavily on copper—tend to decline. Instead, both copper and gold saw their prices rise in conjunction.

Nowadays, copper is also a vital material in electric vehicles (EVs), with recent demand for EVs also influencing the price of copper.

Silver Linings

As investors flocked to safety, silver’s price reached heights not seen since 2010.

The massive scale of monetary and fiscal stimulus led to inflationary fears, also boosting the price of silver. How does this compare to its returns over the last decade?

silver returns 2011-2020

In 2013, silver crashed over 35% as confidence grew in global markets. By contrast, in 2016, the Brexit referendum stirred uncertainty in global markets. Investors allocated money in silver, and prices shifted upwards.

As Gold as the Hills

Like silver, market uncertainty has historically boosted the price of gold.

What else contributed to gold’s rise?

U.S. debt continues to climb, pushing down confidence in the U.S. dollar
A weaker U.S. dollar makes gold cheaper for other countries to buy
Low interest rates kept the returns of other safe haven assets low, making gold more attractive by comparison

Here’s how the price of gold has changed in recent years.

gold returns 2011-2020

Gold faced its steepest recent declines in 2013, when the Federal Reserve bank discussed tapering down its quantitative easing program in light of economic recovery.

Hitting the Brakes On Oil

Oil suffered the worst commodity price performance in 2020, with -20.5% returns.

For the first time in history, oil prices went negative as demand plummeted. To limit its oversupply, oil producers shrunk investment, closed wells, and turned off valves. Unfortunately, many companies still faced bankruptcies. By November, 45 oil producers had proceeded with bankruptcy filings year-to-date.

This stood in stark contrast to 2019, when prices soared 34.5%.

oil returns 2011-2020

As is custom for oil, prices see-sawed over the decade. In 2016 and 2019, it witnessed gains of over 30%. However, like 2020, in 2014 it saw huge losses due to an oversupply of global petroleum.

In 2020, total production cuts hit 7.2 million barrels a day in December, equal to 7% of global demand, in response to COVID-19.