What Residual Effects Stay and Which Go After COVID?

The U.S. economy continues to gain momentum, a rebuilding that began at the start of the year. At the national level, fourth quarter 2020 showed a sharp slowing in economic activity in response to a record surge in new COVID cases, according to Beacon Economics.

The rollout of effective vaccines that began this year has reversed that trend. Growth in the U.S. economy hit 6.4 percent in the first quarter and Beacon Economics is forecasting double-digit growth in the second. This outlook anticipates strong growth in both business investment and consumer spending in the second half of the year, buoyed by a massive build-up in consumer savings and excess commercial bank deposits that have accumulated throughout the pandemic. The output gap that formed at the start of the crisis should be completely erased by the beginning of next year, says the Beacon report.

Some of the other COVID residual may be here to stay, however. Take the grocery business as one example. 

“Pick-up services, Instacart and personal shopper usage has increased with virtually all grocery operators and even though that usage will slow as COVID dissipates, those services are here to stay,” says Jeff Badstubner, JLL managing director. “With this enhancement of business, many grocers have taken the opportunity to evaluate new concepts, elevate designs or experiment with new in store offerings.” 

Specifically, the Raley’s family of stores has launched a new concept in Truckee, CA with several new in-store dining options. And Safeway continues to modify its front-of-house with personal shopper areas and customer pick-up zones. Even related operators to the grocery industry such as Beverages and More have been impacted by the new normal as evidenced by its sale to GoPuff, a digital delivery service operator for the food and beverage industry, says Badstubner.