As US citizens started receiving their $1,200 stimulus checks, Walmart and other big retailers, including Apple and Target, reported increased sales in certain non-essential categories.
Besides the fact that many Americans have spent their stimulus check on the first-priority needs such as groceries, bills and rent, people are also filling their shopping baskets with non-essential goods, among which are clothes, various electronics and toys.
Walmart CEO Doug McMillon made the following statement: “Call it relief spending, as it was heavily influenced by stimulus dollars, leading to sales increases in categories such as apparel, televisions, video games, sporting goods and toys.”
Starting from mid-April, Walmart and Target shoppers purchased more TVs, electronics, gaming equipment and apparel. Walmart also reported increased demand for adult-sized bikes. “Adult bicycles started selling out, as parents started to join the kids. An overlapping trend then started emerging related to DIY and home-related activities,” said McMillon.
Research shows that in order to make face masks at home, consumers also bought sewing machines and bandanas.
Target Corp. CEO Brian Cornell made an informative comment on the company’s Wednesday earnings call. “We certainly saw an uptick as we reported starting on April 15, as those checks arrived across America.”
At the end of April, CEO Tim Cook commented that Apple saw an increase in sales for its products “across the board.” “A part of it is due to just our new products,” Mr Cook said. Another part of it is undeniably “due to the stimulus programs taking effect in April.”
Walmart and Target physical stores have remained open during the coronavirus pandemic and were allowed to sell apparel, unlike narrow-segment stores. Brands like Gap and Nike had to comply with the new regulation and close multiple physical locations across the country. As a result, apparel retailers had to tempt concerned shoppers with rare online deals, similar to those of Cyber Monday.
Relief spending aside, upon receiving their checks in the first wave of stimulus payments, many Americans used the financial aid to stock up on essentials.
Stuart Sopp, CEO and founder of Current, a New York City-based mobile-banking startup, shared his insights into how exactly Americans spent their stimulus checks. “People were struggling for basic life essentials and the stimulus payments really helped them, which I think is what it was all about.” Sopp said that “most people immediately spent on groceries” and many Current members also withdrew cash out of ATMs to “pay friends back and pay their bills.”
Sopp predicts, should the second stimulus check payment happen, most Americans will use the money for the same everyday means, including gas and ordering food delivery and takeout.