US Economy Winners & Losers During the Covid Pandemic

Ever since Covid swept the world in March 2020, one of the most noticeable effects has been on the economies of countries that have used lockdowns and other measures to control the spread of the virus. Economies of some of the richest countries in the world saw their GDPs decrease by as much as 30%.

This was largely a temporary decrease, however, as these economies adjusted to a new way of life and consumers changed their spending habits. Working from home and spending more time there has led to some retailers benefitting from this change in human behavior and some losing a significant portion of their revenue compared to the pre-Covid economy. Using data from the US government website, the animated bar chart on the right shows how these retail industries in the United States changed when Covid hit. The data runs from January 2019 until May 2021. The reason we start the chart in 2019 is to show what a normal economy looks like before such a large change in spending behavior.

Covid Economy Winners in the US

  • E-commerce – This is the big one, since Covid lockdowns and other restrictions forced many of us to buy clothes, food, and other items online instead of going to a brick-and-mortar store. The biggest company to benefit from this trend was Amazon, which saw its market cap double since the beginning of Covid, going from $900B to $1.8T. The e-commerce industry as a whole saw its revenue increase month over month by 30% in June 2020 compared to June 2019. And at its current pace in 2021, the e-commerce industry is set to do $1T in revenue.
  • Grocery Stores – As restaurants and delivery businesses across the country were forced to shut down to contain the virus, many of us found ourselves cooking a lot more. Grocery stores saw a large increase in their revenues in the early months of the virus but are starting to go more back to pre-Covid revenues as the US economy slowly opens again and people go out to eat more. Many of these stores adapted to the online trend as well and were able to grow their delivery businesses to those trapped at home during lockdowns. And it seems many people have made the switch to grocery delivery permanent, although this shouldn’t have a noticeable effect on revenue. The grocery store industry as a whole across the US saw its revenue increase month over month by almost 30% in March 2020 compared to March 2019. This is most likely due to the strict lockdowns imposed in the early days of the virus. However, the industry is still sustaining these gains if we look at the most recent data in May 2021, which shows a 13.7% increase in revenue from May 2019.
  • Building Materials – As most people were cut off from travel and spending much more time in their homes, one logical way to use money that would have been spent on travel is to invest it in your home. Construction and home improvement businesses saw themselves overbooked in the summer of 2020, even as the cost of building materials skyrocketed. The revenue boost for building companies took a little while to happen, with the biggest increase in the summer of 2020 taking place in June, up by 25% compared to June 2019. But we’re seeing an even bigger surge in the spring of 2021 with an increase of 31% in April 2021 compared with April 2019. This could be due to the fact that the price of building materials is getting more back to normal and consumers are starting projects they deemed too expensive in 2020.
  • Alcohol – This is an interesting one to look at simply because it shows how quickly human behavior can change when faced with a crisis with the magnitude of Covid. Many of us found ourselves stuck at home all day so it’s only natural to have a beer or wine in front of the tv after a day of working at home. Depression and increased anxiety also hit many of us. The temptation to let alcohol take of the edge can sometimes be too much. Or it could be that alcohol consumption just changed venues from restaurants and bars to the home. These are all simply theories as to why the increase in alcohol consumption occurred during the pandemic, but it’s mostly likely a combination of all of them. The numbers in this chart represent alcohol purchased from stores that only sell alcohol, so it doesn’t count grocery stores. The increase in alcohol revenue was consistently over 20% during the summer of 2020 compared with the summer of 2019 and up by as much as 25% in September 2020 compared to September 2019.

Covid Economy Losers in the US

  • Restaurants – This is probably one of the most high-profile industries to be hurt by the pandemic as many were forced to shut their doors during the pandemic. Many adapted to the new economy, however, and adapted to a food delivery business when they couldn’t have patrons indoors. During some of the strictest lockdowns of the pandemic in April 2020, restaurant industry revenue was down by over 50% compared with April 2019. There has been a resurgence in the spring of 2021, with revenues largely back to normal (and even slightly up) compared with the same time in 2019 due to the reopening of the economy.
  • Clothing Stores – Like restaurants, clothing stores were forced to shut their doors during the worst parts of the pandemic. Since people could not try on clothes, they were forced to shift their spending to e-commerce, much to the benefit of that industry. Although, many large brick-and-mortar clothing retailers also have an online presence and were able to survive the lockdowns with the help of their websites. But there is no doubt that some spending shifted to e-commerce only retailers. Also like restaurants, clothing stores saw their worst revenues at the beginning of the pandemic, from March-May 2020. In April 2020, revenues were down a whopping 90% compared with April 2019. Spring of 2021 has largely seen clothing stores back the equivalent revenues of 2019.
  • Department Stores – Although department stores have seen a slow and steady decline even before the pandemic, that event certainly sped up the process of consumers shifting their spending from traditional stores to other sources. Department store revenues were down by over 40% in April 2020 compared to April 2019 and these revenues stayed down the rest of 2020 on average by 10-20%. However, like restaurants and clothing stores, revenues have largely recovered to their pre-Covid levels as of the spring of 2021.
  • Gas Stations – The curtailment of travel in the early days of Covid in the US had a large effect on the amount of gasoline consumed by car and truck drivers in the US. Many workers shifted to working at home, thus the need for commuting and paying for gasoline was greatly reduced. Gas stations are a very large industry in the US, with revenues averaging between $40B-$50B per month in 2019. Gas station revenues were down by 40% in April 2020 compared with April 2019 and stayed down by 10-20% for the remainder of 2020. As of the spring of 2021, gas stations have largely recovered as people start going back to the office, with revenues up around 5%.

With the opening of the economy in the US gathering pace, it’s hard to say whether many of the changes in consumer behavior will stay or just go back to the way they were pre-Covid. One thing that most certainly did happen with Covid is the speed in which we saw the inevitable shift in spending from brick-and-mortar retailers to online businesses. This trend doesn’t seem to be slowing down, and even with economies starting to open back up, certain aspects of consumer behavior have forever been changed.