Consumer Spending Intent Higher, but Public Wary About Reopenings, Says Cowen

Spending intentions continued to trend upward, said a COVID-19 Cowen investor report Friday surveying 2,500 U.S. consumers June 25-30. Some 64% of households said they will spend the same or more over the month, up from 59% mid-June, with 13% of respondents expecting to spend more on media and at-home entertainment services during July, it said.

Grocery continued to dominate planned spending at 74%, followed by personal care products (26%) and travel (17%). Some 10% expected to spend more on cable, phone or internet and 9% said they will spend more on electronics.

Purchase intentions are up, but “fears worsened across the board” about returning to retail stores, gyms, churches and other venues, Cowen said. Despite brick-and-mortar reopenings over the past month, 44% of respondents said their online spending was higher, consistent with trends from the previous four surveys.

Retail fared better than other physical locations in consumer comfort level, though at a 5.2 on a scale of 1-10, with one being lowest. The relative performance of retail stores “supports a loyalty factor that many retailers and brands have worked to develop over time," Cowen said. That "may help in sponsoring recovery faster and provide a market share opportunity over peers.”

Survey answers indicated 30.4 million U.S. workers are concerned about job security, down from 51.8 million in a mid-April survey. Respondents expect COVID-19 to disrupt their lives for about 7.7 more months vs. 6.9 months in May, it said. Of those expecting their income to decrease over the next three months, 43% plan to dine out less; 18% to cut spending on books, magazines and music; 14% to cancel digital streaming subscriptions; 13% to cut back on cable services; and 8% to switch to a cheaper phone plan.

Sentiment on airline travel slipped in the late June survey: On a scale of 1-10, respondents gave air travel a 4, slipping from 4.3 in mid-June. Some 35% said it would take 12 months or more to be comfortable with air travel, rising from 29% mid-June. Average response for feeling safe to stay in a hotel again was seven months in late June vs. 6.4 months in mid-June; 26% said it would take 12 months or more, up from 20% mid-June.