How Covid has Impacted the Local Market

The economic indicators for Q1 and Q2 of 2020 paint a vivid picture of how the coronavirus has impacted our local economy. As shutdowns, regulations and mandates were imposed in the name of public safety, many within our business community were left scratching their heads and trying to map what is to come. The first two quarters of 2020 show that one thing is for certain: The coronavirus has impacted ways local consumers are spending and planning for the future.

Retail sales for Bossier Parish and Bossier City in March of this year showed a combined increase of 23 percent from the prior month. This positive increase for March is likely attributed to purchases made at the “big box” department stores such as Home Depot, Lowes, Super Target, Super Kroger and grocery stores, which remained open as they were deemed essential during the stay at home orders. Data from the Buxton Consumer Dashboard shows consumer activity classified by NAICS code within trade areas. The consumer activity data for Bossier City during the month of March clearly supports this attribution of increased activity at department and grocery stores as consumer activity trends during this period surpassed the previous year.

We can see the changes based on discretionary spending behavior, which provides insight into the level of consumer confidence. Examples of discretionary purchases are apparel, entertainment, leisure and automobiles. During the onset of the coronavirus pandemic, retail spending in Bossier Parish dipped by 14 percent from the first quarter to the second quarter of the year. While some of the decline in sales volume can be attributed to the business regulations in place, the spending decline was also accompanied by a rise in unemployment which surged over 13 percent for the Shreveport-Bossier MSA at its highest in April 2020. Consumer intent of essential purchases are staying strong but do show fluctuations based on the number of cases reported. The dip in retail sales ultimately affects the sales tax revenue collected by cities and parishes.

According to a consumer sentiment survey conducted by McKinsey and Company, 68 percent of Americans are not engaging in outof-home activity and are waiting to see what is in store for public safety as restrictions are lifted. This sentiment could last more than six months as more Americans are getting comfortable with what some experts are calling “homebody economics.” This is leading to more home-based purchases such as home office furniture and home exercise equipment.

Changes in how goods and services are purchased are also shifting. Consumers show a preference for online shopping, while e-commerce sites fight for sales during the digital decision-making process. These factors are changing brand loyalty and even store loyalty. Locally, many brick-and-mortar stores have adjusted to offer curbside service and online ordering instead of in-person interactions. This is also an important part of pivoting to meet the needs of customers as they want to feel safe while shopping and participating in the economy.

As restrictions ease and we settle into Phase III, we can expect to see a rebound in some areas important to our regional economy. Tourism and travel, for example, were negatively impacted by the pandemic. Looking at the local casino numbers alone, you can see revenue increased in the region at all gaming properties, and some are up in admissions over 100 percent since regulations have eased. Hotel/motel revenue in Bossier was up 17 percent from June to July 2020. Our market will likely sustain an uptick in hotel/motel sales due to the extended summer many experienced with a delayed start to the school year as well as the recent natural disaster experienced in the southern part of the state brought on by Hurricane Laura.

Looking ahead, it is hard to predict what is in store for local and national economic stability. The few numbers we have for comparison from Q1 to Q2 of this year do point to a negative fluctuation in consumer confidence as it relates to the number of coronavirus case counts. It is still unknown how the ruling on liquor sales will affect retail and gaming in the state. As we settle into Phase III, it will likely bring about continued increases in sales volume and economic activity, along with a decrease in unemployment which provides a boost as we move into the holiday shopping season.

David R. Rockett Jr. serves as the executive director/president of the Greater Bossier Economic Development Foundation.