A fresh round of data reveals a strengthening economic recovery:
The resurgence in foot traffic and consumer spending appetite spells good news for retailers. Brick-and-mortar retail—which makes up the majority of overall retail sales—was one of the hardest-hit sectors during the pandemic: An estimated 12,200 stores closed for good last year, up from 10,000 in 2019, according to data from CoStar cited by Fortune. However, with the worst of the pandemic appearing to have passed in the US market, consumers seem eager to shop in-store again. This desire to spend is underpinned by improving economic conditions as well as the COVID-19 vaccine rollout, indicating there might be a return to pre-pandemic foot traffic levels in the coming months—helping retailers recover losses from the past year.
Card issuers and networks also stand to reap the benefits of increased consumer spending. This sector suffered as a result of consumers pulling back spending during the pandemic: JPMorgan’s credit and debit card sales volume dropped 23% year-over-year (YoY) in Q2 2020, for example. In an attempt to pick volume back up, issuers like Amex updated their offerings to reflect pandemic-driven spending trends, adding rewards for streaming and food delivery services. The recent improvements in personal income and foot traffic could lead to a bump up in card volume for issuers and card networks, helping them make a full return to pre-pandemic volume sooner rather than later.
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