Post-Pandemic Shoppers Are Staying Home

The Hermit Economy

Even with lockdowns in the rearview mirror, consumers today remain hesitant to spend big on going out. But that doesn’t mean they’re not still spending while staying in.

This post-pandemic trend — dubbed the “hermit economy” — could potentially signal a long-term shift toward a home-centered lifestyle and economy.

Reallocating Resources

From dining out to recreation, outdoor leisure pursuits have seen a downturn.

Consumers across the world are currently spending $600 billion less on services than expected, according to an Economist analysis of 32 OECD countries. Instead, they’re opting to spend more on tangible goods like kitchen appliances and clothing.

The effects on the service sector have been tangible too. Olive Garden-owner Darden Restaurants (DRI) has taken a 20% hit to its patronage since pre-pandemic. Beauty services like hairdressing are seeing a similar downturn.

Home Is Where the Market Is

Conventional wisdom might be that pent-up demand for services would lead sales to soar post-pandemic. And while the sector has seen some spikes attributed to revenge spending, when we zoom out the numbers tell a different story.

The primary driver of the hermit economy is unclear. Lingering reluctance for close-contact services, the rise in remote work, and a shift in social values could all play parts.

But the trend’s importance is clear, for companies and consumers alike. The services shoppers value most today are ones that can be enjoyed from the comfort of home.

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