Walmart and other big retailers, such as Apple and Target, have reported increased sales in certain non-essential categories, as US citizens started receiving their $1,200 stimulus checks.
Besides first-priority needs such as groceries, bills and rent, many Americans have also spent their stimulus check on non-essential items, among which are clothes, various electronics and toys.
“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”, said Walmart CEO Doug McMillon.
Starting from mid-April, Walmart and Target have experienced an increase in TVs, electronics, gaming equipment and apparel sales. And it’s not only that. Walmart also reported increased demand for bikes for adults and DIY components. McMillon explained, “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.”
Some consumers have also taken it to the extreme, making their own face masks at home. Consumers also bought sewing machines and bandanas, for this DIY project.
“We certainly saw an uptick as we reported starting on April 15, as those checks arrived across America.” Target Corp. CEO Brian Cornell commented on the company’s Wednesday earnings call.
Towards the end of April, CEO Tim Cook reported on Apple’s increase in sales for its products “across the board.” “A part of it is due to just our new products,” Cook said. Yet, another part of it is certainly “due to the stimulus programs taking effect in April.”
Walmart and Target physical stores have remained open during the worldwide pandemic lockdown 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 world. As a result, apparel retailers had to tempt online shoppers with limited online deals, similar to those of Cyber Monday.
Apart from relief spending, many Americans used the financial aid to stock up on essentials, upon receiving their checks in the first wave of stimulus payments.
CEO and founder of Current, a New York City-based mobile-banking startup, Stuart Sopp, 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.” He continued, “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 that in case the second stimulus check payment happens, most Americans will use the money for the same everyday means, including gas and ordering food delivery and takeout.
