During the pandemic, Whatcom residents dramatically changed how they shop. Here’s how
Last spring when COVID-19 restrictions slowed down Whatcom’s economy, residents dramatically shifted their spending habits.
During the second quarter Whatcom County rung up $1.05 billion in overall sales, which was down 14.6% compared to a year earlier, according to the Washington State Department of Revenue. Retail trade, which focuses on sales in stores, totaled $518.9 million for the second quarter, a decrease of 7.4% year-over-year.
This period, beginning at the start of April through the end of June, was a chaotic period for pandemic restrictions, with many businesses closed while others were open for limited capacity or delivery. Restaurant sales suffered greatly, with sales falling from $102.9 million in the second quarter of 2019 to $58.6 million last spring. Sales from hotel bookings tumbled 75% to just $5.7 million.
Whatcom County shopping habits for other items changed as people stayed home:
▪ Garden and building material sales rose 12.2% year-over-year, while electronics rose 4.5%.
▪ Clothing and accessories sales dropped a staggering 50% to $13.6 million, while sporting goods dropped 20.1% to $21.4 million. Car sales (down 16% year-over-year), furniture (down 15%) and big box stores (down 15.1%) also shrunk significantly.
Whatcom’s big box stores are a common landing spot for Canadian cross-border shoppers, so a big part of the decrease in sales could be coming from the border restrictions that started in March. For context, in recent years a significant weakening of the Canadian dollar would typically mean a year-over-year drop in sales of less than 10%.
▪ Data for the grocery store category is a bit of a head-scratcher, however. Whatcom sales in that category were down 4.5% for the second quarter, but did spike 8.5% in the first quarter compared to a year earlier. That could suggest some panic buying that took place in March that tailed off in the second quarter. A similar trend took place in Skagit County, according to the Department of Revenue’s report.
It could also be a reporting issue, given all the changes that have happened at grocery stores, said Hart Hodges, co-director at the Center for Economic and Business Research at Western Washington University. He noted the switch by many customers to online grocery ordering and curbside pickup as well as the big sales increases reported by grocery companies during that period suggest it was a strong second quarter for local stores.
What this means going forward
Sales numbers for the hard-hit Whatcom businesses will continue to struggle until at least next spring, when a gradual recovery will start, said James McCafferty, also co-director at Western’s economic research center.
“I don’t expect a ‘full’ recovery until the very end of 2021 at the earliest but sometime in the first half of 2022 more reasonably,” McCafferty said in an email, adding that we have “a pretty big hill” to get over between now and March.
Hodges agreed that the coming months will be challenging for Whatcom’s economy and stressed the need for more government stimulus packages. While the U.S. hasn’t done as well as other countries in dealing with the pandemic, the overall economy has held together because of the size and speed of the spring stimulus packages.
“The longer we wait for additional stimulus, the harder the problems are to fix,” Hodges said in an email.
How that economic recovery takes shape will depend on human behavior and the success of the vaccine, making it very difficult to forecast in every industry, McCafferty said.
For example, will car sales bounce back slowly, since people have been commuting less, resulting in less wear-and-tear on current vehicles? Or, even with a vaccine, will people continue to dine out less frequently, or travel? Or will employers continue to have people work from home if they can?
“I’m not sure what the answer is going to be. There will be change that much I can say,” McCafferty said.
This story was originally published December 2, 2020 at 5:00 AM.
