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The crown crisis is causing an unprecedented shock to Dutch consumer spending. They will drop 5 percent this year, according to ABN Amro. That is a much larger drop than two percent from the financial crisis.
The bank has a scenario in which the measures currently in force, the “smart block”, will last a total of two months.
The measures, which included the closure of catering establishments, gyms and hairdressers and major events are no longer allowed, have been in effect since March 13 and last until May 12 on the bank’s stage.
Unprecedented shock
That would cut spending by 4.75 percent. Because the measures will be lifted step by step, they will be spent even less later, representing a 0.25 percent decrease.
That consumers spend less is one of the main reasons the Dutch economy will go into recession this year. Consumer spending represents 45 percent of total GDP, the bank said.
The bank bases its prediction of this “unprecedented shock” on, among other things, the spending pattern over the Easter weekend. This is usually a period when a lot of money is spent. Last weekend, consumer spending fell 22 percent from last year.
Department store spending reduced
The biggest drop was seen in department stores, probably because many family visits were canceled, so there was no need to buy gifts and a fancy Easter outfit. The call not to go to a garden center or DIY store is also reflected: Spending on home, garden, and interior fell 60 percent.
The winners then: supermarkets, not only thanks to the hamster. Because people work from home and cannot go to a bar or restaurant, they spend more on groceries. And specialty food stores also benefit from this.
Hospitality collapsed
Online food ordering has doubled in recent weeks, the bank reports. But the food delivery market, with an estimated turnover of 1.7 billion euros, is disproportionate to what is normally spent eating out. That market represents 19 billion euros, and spending there fell by 74 percent.
The fact that the catering industry is closed and focused on the collection service can also be seen in the payment behavior of consumers. To minimize the use of cash, banks are seeing a sharp increase in contactless payment, the Dutch Banking Association reported earlier this week.
They see this trend reflected in the figures of ING and ABN. At the old bank, the number of contactless payments increased from 64 percent before the crisis to 71 percent now. Only 29 percent of all debit card payments are entered by entering the code, which was 36 percent before the crown crisis.
Turn at Tikkie
A change is also noticeable with the payment application Tikkie, from ABN Amro. The number of business-to-consumer transactions has doubled, the bank simply does not mean how many transactions are involved. It is an average of 98 euros per transaction.
The number of ticks sent between people has decreased: from 250,000 per day in the first months of this year, to 225,000 in the last two weeks. Logical: deleting the vrijmibo account, just to name a few, has not been necessary for weeks. The decrease may not be greater, perhaps because people settle the food they have for each other through the payment request application, according to the bank.
The amounts for which people send each other a payment request do not show a corona effect: it is an average of 35 euros. And payment morale isn’t affected by current circumstances, either: On average, 85 percent of all requests are completed in 12 hours.
