Institute Research Shows Impact of COVID-19 on Local Commerce, Spending Declines

JPMorgan Chase Institute

The JPMorgan Chase Institute released new research that examines the COVID-19 pandemic’s localized impact through the lens of consumers and merchants across 16 U.S. cities:  Phoenix, Atlanta, Chicago, Columbus, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, New Orleans, New York, Portland, San Diego, San Francisco, and Seattle. This new research is the third in a series of insights that uses near real-time data to investigate the financial impacts of COVID-19.

Leveraging approximately 450 million monthly credit card transactions from a sample of 11 million de-identified Chase credit card holders through March 2020, researchers analyzed:

  • the change in purchase of local goods and services, including impacts to high-income versus low-income neighborhoods
  • access to food
  • shifts in the types of products and services purchased
  • shifts from brick-and-mortar to online

The JPMC Institute will continue to release additional insights over the coming months as part of this COVID-19 series, examining topics such as household income and small businesses outcomes, to help inform efforts aimed at supporting economic recovery. Forthcoming research will also continue to explore these local differences in spending, which are potentially affected by: timing of local stay-at-home orders, the extent of the local COVID-19 outbreak, the local economy – including dominant industries and job loss –and the accessibility of food in different communities.


While there was wide variation across and within cities, overall spending declined across all cities we studied, regardless of the severity of COVID-19 outbreaks and local stay-at-home orders; lower-income neighborhoods were most likely to experience the most significant spending declines.

Spending declined in all cities in March 2020 – San Francisco, Chicago, New York, and Detroit saw the sharpest declines.

  • Consumer spending declined the most in San Francisco (16.6%), the first city to issue stay-at-home orders, and spending declines were also greater than the national average in Chicago (15.3%), New York (15.1%), and Detroit (13.5%), three major cities with some of the highest COVID-19 case rates to date. Even cities with limited COVID-19 outbreaks in March, such as Houston, saw significant declines in spending.
  • Of the cities we observe, Phoenix, Denver, Portland, and Dallas had the smallest comparative declines in spending. 

A disproportionate share of lower-income neighborhoods experienced extreme spending declines, and consumers in lower-income neighborhoods had to travel farther to access groceries than those in higher-income neighborhoods.

  • The average spending decline across all neighborhoods was 9.5%, but lower-income neighborhoods experienced a disproportionate share of severe spending declines over 15% below the average spending decline, which could be in part due to decreased spending as a result of job loss. 11.5% of the lowest-income neighborhoods experienced severe spending declines, whereas only 4.1% of the highest-income neighborhoods had severe spending declines.
  • The relative access costs, or median distance traveled, for groceries decreased across the income spectrum as consumers shifted to online purchases and stores closer to home, but the median travel distance fell farthest for consumers in the highest-income neighborhoods while consumers in the lowest-income neighborhoods experienced little change.
  • Consumers in the lowest-income neighborhoods travelled a median distance of 2.7 miles to access grocery stores, whereas those in the highest-income neighborhoods travelled a median distance of 2.5 miles.

Across all cities we observed, there were significant declines in offline or brick-and-mortar spending, dropping 22.6% year-over-year; online spending increased by 1.5% year-over-year.

  • Nearly half of all neighborhoods, regardless of income level, reduced offline and online spending.  Online purchases were primarily on essential goods and services – online spend on groceries more than doubled, and online spending on pharmacies (33.4%), general goods (19.9%), and restaurants (12.1%) also increased substantially. Online spending increased the most in Portland (11%), Seattle (10.6%), and Phoenix (9.7%).
  • Brick-and-mortar spending declined the most in San Francisco (-31%), followed by Seattle (-27.7%), New York (-24.9%), and Los Angeles (-24.5%).
  • Overall, 8% of local spending shifted from restaurants to grocery stores. We find proportional changes in food spend allocated to groceries versus restaurants to be relatively even across neighborhoods of all income levels for this time period.  However, lower-income neighborhoods are more likely to have the lowest increases in online grocery spend.
  • Lower-income neighborhoods did not increase online grocery purchases to the same extent as high-income, but the lowest-income neighborhoods increased online spending at restaurants by 24.4%.

These findings come with important caveats:

  • At the time of writing, researchers only observe the initial, short-run reaction of credit card spending to COVID-19. This insight analyzes spending that occurred on Chase credit cards through March 31, 2020. It does not observe spending via debit cards, cash, and non-Chase credit cards.
  • While the data include households across a wide cross-section of income levels and geographies, the Chase credit card holders sample tends to be more affluent than the average U.S. households.
  • Spending changes, and how these vary with consumer and neighborhood characteristics, may evolve over time, including changes in spending across credit cards versus other payment channels.
  • In future insights, we will broaden the time-period and array of payment channels to include Chase debit cards and checking account transactions data.

“As the COVID-19 pandemic spread and businesses closed, consumers across the country sharply reduced buying at brick-and-mortar businesses and shifted their spending online,” said Diana Farrell, President and CEO, JPMorgan Chase Institute. “Across all cities that we studied – regardless of the severity of COVID-19 outbreaks and local stay-at-home orders – we see that all people changed their spending habits in reaction to the COVID-19 crisis. Unsurprisingly, the changes vary by city and by neighborhood with one through line: lower-income communities disproportionately experienced more severe spending cuts, which could impact their long-term health and wellbeing beyond the pandemic.”

The JPMorgan Chase Institute is a think tank dedicated to delivering data-rich analyses and expert insights for the public good. Drawing on JPMorgan Chase & Co.’s unique proprietary data, expertise, and market access, the Institute develops analyses and insights on the inner workings of the global economy, frames critical problems, and convenes stakeholders and leading thinkers.

Over the last five years, the JPMorgan Chase Institute has produced research on consumerssmall businesses and the markets that is being used today to inform the potential economic impact of the COVID-19 pandemic, as well policy solutions like the U.S. Small Business Administration’s Payment Protection Program, stimulus checks, and support for CDFI lending to underserved small businesses. Recently, the Institute also released research on racial gaps in financial outcomes. The report shows how Black and Hispanic families are more vulnerable to crises such as COVID-19.

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