Corona Daily 051: On the Recovery Road

Throughout the pandemic, I have been running a private research, just for myself. I ask the self-employed, my businessmen friends, restaurant owners, carpenters, taxi drivers, shopkeepers what their recovery has been like. Usually they give a percent figure. Last year, when lockdowns were strict, the percent never went beyond 30%. Now the luckier ones talk about 50%. Only a single friend, a sales manager for a medical equipment company said their sales have grown 250%. He has been working day and night, trying to meet the demand.

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Yesterday, YELP has published in a formal manner similar data for the USA. Yelp is a San Francisco company that is a data king. It publishes crowd-sourced reviews about restaurants and other businesses. There are more than 200 million reviews on its business listing pages. Recovery of consumer interest can be measured by counting the actions consumers take to connect with businesses on Yelp: the number of time a page is viewed, photos or reviews posted. If reviews for a certain restaurant suddenly double, it is safe to assume its business is recovering well. In this research Yelp analysed millions of data points across 1200 categories in all 50 American states.

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One big danger of the growth numbers you see in 2021 is that they are compared to the lockdown period of the previous year. The April-June quarter in particular was so abnormally depressed last year; that year-on-year numbers in April-June 2021 for anything will look rosy to miraculous. That growth number can be fallacious.

To avoid that pitfall, Yelp studied consumer actions in three periods: (1) Pre-pandemic: March-May 2019 (2) The onset of the pandemic: March through May 2020 and (3) the start of recovery: March through May 2021. The 2019 pre-pandemic period is used as a baseline, with the 2019 data expressed as 100%. Below, in brackets are the 2021 percent as compared to 2019 (and not 2020).

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After a dramatic drop in 2020, American restaurants have now bounced back to 86% of 2019. Food business recovered to 92%. People are less worried about in-person dining as well as shared food experiences. Conveyer belt sushi (97%), tapas (82%), hot pot (75%), dim sum (84%) have rebounded. Buffets, not surprisingly, have recovered only 52%.

While this is happening, people can’t give up the lockdown addiction of home orders. Food delivery services are 189% compared to 2019.

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Americans are out for revenge shopping. Personal savings level is at their highest since the 1960s. Consumer interest in shopping is almost complete, it is 92%.

Shoes (79%), jewelry (88%) and clothing (76%) are doing well. As far as shopping venues are concerned, antiques (100%), flea markets (94%), vintage shops (87%) and charity shops (101%) have reached the consumer interest levels of 2019.

Home service professionals are in high demand, partly because of workspace in houses that needs maintenance or upgrading. Consumer interest in carpenters (151%), handyworkers (147%), plasterboard (147%), refinishing (133%), and tiling (132%) is booming, surpassing pre-pandemic levels. The heated housing market in the USA has completed recovery for real estate agents (104%) and mortgage brokers.

Many Americans are presumably planning to return to offices. Shoe repair (77%) and watch repair (99%) services suddenly surged in the past three months. While childcare services (71%) are slowly recovering, the demand for pandemic pet care has grown as shown by interest in pet sitting (114%), and pet boarding (121%).

With people itching to leave houses, interest in campervan dealers (125%), motorcycle dealers (126%), and used car dealers (110%) presents a picture of America on the road.

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In terms of geography, Idaho, Wyoming and South Dakota (110%) are the leaders in recovery. Florida (98%), Georgia (91%) and Texas (91%) are getting there.

Washington DC (54%), New York (63%) and Massachusetts (71%) are the laggards. They have densely populated metro areas, and lingering pandemic restrictions.

I must point out that the Yelp report data is about consumer interest, not necessarily consumer action. That is measured by actual purchases of goods and services. However, consumer interest is a good indication of the direction of the recovery graph. It shows that the American consumer sentiment is optimistic again.

Ravi