How Fast Is the Consumer Mood Going to Recover After Covid-19?

It is not surprising, that the consumption comes to a standstill especially when you think, for example, about holidays and Sundays.  But in such cases, it is clear that the consumption volume is going to increase immediately. According to the State Secretariat for Economic Affairs SECO, due to the Covid-19 pandemic in the time span from the 16 March to the 10 May, consumption in general has decreased more than 20 percent. But how fast is the consumer mood going to recover after closing the shops due to Covid-19? Is the amount of purchases going to catch up?

The project “Monitoring Consumption Switzerland“ carried out by the Swiss University of St. Gallen and Lausanne and Novalytica, is trying to answer those questions. SIX, SPS Worldline and the Swiss Payment Association is supporting this action. The partners analyze the ongoing transaction volumes from ATMs, debit and credit cards through the point of sale and online payments in Switzerland. The collected data is subject to a strict aggregation procedure to make sure that neither personal nor business related data is extracted. The anonymized data is available to the public. Here are the key findings of the study:

After reopening the shops on 11 May, the volume of card transactions (incl. point of sale, online transactions and cash withdrawals) increased by five percent until the end of June in comparison to the periods before closing the shops. This increased number of transactions made by card is only slightly lower than the seasonal increase of such transactions in early summer last year.

Payments with debit cards in point of sales increased from mid-March (beginning of lockdown in Switzerland) to the beginning of July by five percent in comparison to last year. Explanation: switching from cash to card. Not all sellers benefit from this positive effect. Unlike shops with clothing, DIY stores and restaurants, groceries were always open. Compared to the previous year those shops record a significant increase. The gastronomy and hotel industry as well as clothing stores are in the red compared to last year. However, those sectors recovered after the reopening only partially. The catch-up everyone wished for did not happen. 

Covid-19 has definitely beaten city centers. The revenue of debit cards increased by seven percent from mid-March to the beginning of July, which was beneficial for rural areas and urban agglomerations. One reason is for sure home office, all expenses moved to the residential areas. Cantons with big cities like Zurich and Basel recover accordingly slower in terms of the increasing consumer mood, than other areas.

Payment data show the economic development faster. SIX supports researches investigating the matter of changing payment behavior. More findings from this research are available in the video below (in German) or on the website of Monitoring Consumption Switzerland.