Could Retail Traffic Declines be Attributed to Excess Mortality Rates?

Jan 24, 2023 | Finconomics 101, No Bull Economics

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Traffic declines across the board in both restaurants and grocery stores suggest fewer people eating. The shocking statistic is that 2021 life insurance payouts were much higher for group plans typically associated with young, healthy corporate employees relative to individual policyholders. 

Life Insurance Payouts and Death Care Service Trends

According to data from the National Association of Insurance Commissioners (NAIC), life insurance payments to beneficiaries spiked +15.4% in 2020 and increased by another +10.8% in 2021. Interestingly, this is not the first time in history that payouts spiked with a +13.1% y/y increase in 1994 (attributed to HIV, diabetes & Alzheimer’s) and +9.5% in 2015 (attributed to Alzheimer’s, strokes & drug overdoses).

Notably, 2021 life insurance payouts under corporate group plans increased +15.1% y/y vs. +9.2% y/y for individual policyholders, suggesting a higher death rate for typically younger, healthier corporate employees. As corporate employees are most likely to drive retail sales, an excess mortality rate among this demo could explain pervasive traffic losses across both dine-in & dine-out. 

Life Insurance Payouts Graph
Life Insurance Payouts Graph

An elevated loss of life in 1994, 2020 & 2021 is further confirmed by the death care service industry revenue provided by government data. Notably, industry revenue growth continued about 2x the 3.1% quarterly median (from 4Q09) during 1Q22 & 2Q22.   

Death Care Service Revenue Graph
Death Care Service Revenue Graph
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Noblesse Oblige for the Masses

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Performance Food Group (PFG) Investor Presentation – January 2023

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Record Inflation Plunges Consumer Confidence

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