Covid Leaves Lasting Mark on Consumer Spending, Fueling 'Hermit Economy' of Goods Over Services
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Consumer spending on services remains below pre-covid levels, with $600bn less spent on activities outside the home. More money is going to goods like furniture and clothes.
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Countries that spent less time in lockdown, like New Zealand and South Korea, did not see big shifts in consumer habits. But hermit behavior looks ingrained in places like the US and Czech Republic.
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Fewer people work in hospitality, so constrained supply rather than high demand explains crowded restaurants and hotels. Firms notice the shift, like Olive Garden's 20% drop in traffic.
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Possible reasons include lingering covid fears, more remote work cutting demand for office services, and values shifting to favor solitary pursuits.
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Covid's legacy seems to be pulling people apart. Global searches for solitaire have doubled, suggesting people became more isolated.