While many Americans have used their stimulus checks to cover basic necessities like groceries, mortgages, or rent, there is evidence that people also spend money on non-essential items, such as appliances electronics, clothing and toys, according to major retailers.
“Let’s call it aid spending because it was heavily influenced by stimulus dollars, which resulted in increased sales in categories such as clothing, televisions, video games, sporting goods and toys “, Walmart
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CEO Doug McMillon said Tuesday during the call for company results.
goal
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and Best Buy Co.
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He also saw an increase in consumer demand for discretionary goods in mid-April, as US $ 2.2 trillion CARES Act stimulus payments were made to Americans’ bank accounts, said the CEOs of the company this week. Apple
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He has seen an increase in demand for his products “across the board,” said CEO Tim Cook on April 30.
Related: Best Buy shares rise after profits, revenues and sales at same store decline less than expected
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At Walmart and Target, buyers bought more televisions, electronics, play equipment, and clothing. Walmart has also seen an increased demand for adult bikes.
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At Walmart and Target, buyers bought more televisions, electronics, play equipment, and clothing. Walmart has also seen an increased demand for adult bikes.
Customers at Best Buy used their stimulus checks to buy computers and gaming equipment, Corie Barry, the company’s CEO, said on Thursday when the results were called.
“Like many other retailers, we have seen business profit in the last three weeks of the quarter as customers have definitely decided to spend some of their government stimulus money on the products and services we provide,” said Barry.
(Best Buy did not respond to a request for additional comment.)
The different phases of the pandemic shaped the choices of buyers. While orders to stay at home have been issued across the country, “parents have become teachers,” said McMillon when calling for Walmart results. “The adult bikes started to run out when the parents started reaching out to the kids. Then an overlapping trend related to DIY and home-related activities began to emerge.
Consumers have also bought sewing machines and scarves to make their own masks, he said.
Sales took off in mid-April, when many Americans began receiving their $ 1,200 stimulus checks. Research shows that within 10 days of receiving their stimulus checks, households spent about a quarter to a third.
See also: Walmart spent nearly $ 900 million on Q1 coronavirus and says it is a “reasonable estimate” that they will spend as much in Q2
Before the checks were issued on April 15, “there was not as much demand” for discretionary goods at Walmart, said spokesman Randy Hargrove, adding that sales had increased “towards the end of the quarter”.
Target Corp. has also seen “a rapid increase in traffic and sales” of discretionary goods driven by the distribution of stimulus checks, CEO Brian Cornell said on Wednesday when calling the company’s results. “We certainly saw a slight increase when we reported from April 15 when these checks reached the whole of the United States,” Cornell said when the company called.
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Before the checks were issued on April 15, “there was not as much demand” for discretionary goods at Walmart, said spokesman Randy Hargrove.
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Customers, he said, “are still seeing the benefits of stimulus testing.” People buy in all categories, including clothing, which have been particularly affected by the economic downturn caused by coronaviruses.
IPhone maker Apple has also seen a surge in sales after the cancellation of stimulus payments, Cook said in the company’s April 30 earnings call. “Part of this is due solely to our new products,” said Cook. But another part is also due “to the stimulus packages that came into effect in April”. (Apple did not respond to MarketWatch’s request for additional comments.)
Unlike Target and Walmart, which remained open during the coronavirus epidemic and can sell clothing in stores, “non-essential” clothing retailers, including Gap
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Nordstrom
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and Nike
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They were forced to close many stores across the country. As a result, retailers in the apparel industry have offered consumers online deals comparable to Cyber Monday.
Yet many Americans have used their stimulus checks to source essentials. This is especially true for those who received their checks in the first wave of stimulus payments, said Stuart Sopp, CEO and founder of Current, a New York-based mobile banking startup.
In mid-April, when the payments were originally distributed, “most people immediately spent on groceries,” said Sopp. Many current members, he said, also withdrew money from ATMs to “pay their friends and pay their bills”. He added, “People were fighting for the basics of life and the stimulus payments really helped them, which I think was all.”
In the next wave of payments, which took place in late April, more people used the funds “for everyday media,” said Sopp. This included ordering deliveries and additional home deliveries and gasoline.
The $ 3 billion coronavirus aid program approved by the House of Representatives last week, called the HEROS law, calls for a second round of stimulus checks. President Donald Trump and Senate Majority Leader Mitch McConnell have indicated that they in no hurry to sign the legal aid package. Trump has shown support for a second round of stimulus checks.
If people end up receiving a second dunning check, Sopp predicts that most will use the money for the same purpose.
Best Buy’s Barry said on Thursday that “the impact of current and potential government stimulus packages” is something the company will monitor “for the rest of the year”.