One Year After COVID-19 Declared a Pandemic: Consumers Turning the Corner?

NEW YORK, March 22, 2021 /PRNewswire/ --

Key takeaways

• Overall anxiety levels declined by 10% in the United States. Worldwide, anxiety is at the lowest level since April 2020.
• After months of decline, consumer safety perceptions are improving with more than half of consumers (53%) globally feeling safe going to the store; in the U.S. that number jumped from 51% in late December to 64%.
• However, consumers are balancing near-term optimism with longer-term expectations. Consuming at home and avoiding crowds are likely to remain after the health crisis has passed.

Why this matters
Over the past year, as a global health crisis morphed into an economic one, Deloitte has been conducting a series of monthly surveys, around the globe, to better understand the interplay between personal safety and economic vulnerability as a driver of purchase decisions and consumer behavior. The most recent iteration of "Deloitte's Global State of the Consumer Tracker" was conducted in 18 countries during the week of Feb. 25-March 3, and queried at least 1,000 consumers in each country. The responses indicate that, one year after COVID-19 was officially declared a global pandemic, some hope is on the horizon.

Global anxiety trends to lowest point since April 2020
Globally, anxiety caused by COVID-19 seems to be steadily diminishing. However, despite a significant spike in feeling safe to venture from home to go to stores, work, restaurants and other public places, concern over personal finances continues to accelerate for many consumers.

• With weeks of decline in new COVID-19 cases and the rollout of vaccinations, net anxiety among those surveyed declined across most regions. In fact, the UK, Japan, and U.S. saw the most improvement (10% decrease in the past month).
• More than half (51%) of global respondents and 64% in the U.S. feel safe returning to work. Despite this, across the globe, COVID-19 continues to be the leading driver of anxiety for those surveyed in most countries with financial stress (46%) and employment (36%) at No. 2 and No. 3.
• In the U.S., nearly as many surveyed consumers are worried about contracting COVID-19 as they are about their finances (51% and 48% respectively).
• In fact, nearly one-third of global respondents (29%) are worried about making upcoming payments, and that number is even higher (36%) for ages 18-34.

Discretionary spending makes gains
While financial stress weighs on consumers, global intent to spend on discretionary items, which had stagnated since last summer, is improving in the U.S. and Europe, with mixed sentiments in Asia. With the vaccine rollout and latest stimulus, further signs of easing can be expected.

• Three in 4 U.S. consumers surveyed plan to spend the same or more on apparel and restaurants in the coming weeks. 
• Signs of optimism are emerging for areas like travel, with vaccinated consumers indicating higher intent to travel and stay in hotels over the next three months. In the U.S., vaccinated consumers surveyed are 35% more likely to plan a flight than those who aren't vaccinated.
• Although leisure travel booking intent continues to improve across all categories, 1 in 3 consumers surveyed say they are waiting to take a vacation until after the pandemic.

Key quote
"The stress of the pandemic is shifting from personal safety to financial security as we turn the corner and vaccinations become more readily available. Yet, despite a rise in financial stress related anxiety, consumer intent to maintain or increase discretionary spending is also on the rise, demonstrating more confidence in the recovery. With the passing of the stimulus bill recently, and checks beginning to roll out, businesses may very well expect to see consumer spending trends accelerate." 

-  Anthony Waelter, vice chairman, Deloitte LLP and U.S. consumer industry leader

The next normal: Post-pandemic consumers expected to continue cocooning and keeping their distance from strangers
While, across the world, consumers are feeling less anxious, some behaviors are not likely to return to pre-pandemic patterns any time soon. Instead, overall many consumers plan to avoid congregating with strangers and continue to consume at home.

• Travel: In the near-term, pent-up demand for travel indicates a temporary uptick, with 29% of consumers surveyed feeling safe to fly, and 37% of respondents feeling safe staying in a hotel. However, globally, surveyed consumers' net expectations are to fly and stay in hotels less post-pandemic than they did pre-pandemic.  
• Eating habits: Globally, 55% of consumers surveyed plan to continue cooking more at home than pre-pandemic (only 5% say less); 38% of respondents plan on ordering more take-out or delivery than pre-COVID (25% say they will do it less), rather than eat in-person at a restaurant (15% plan to do this more than pre-pandemic, but about 40% of respondents plan to eat at restaurants less frequently).
• Work: Worldwide, consumers also plan on continuing to work remotely, even post-COVID. When compared to pre-pandemic levels, 43% of surveyed consumers believe they will be working more from home, while 18% think they will do this less than before.
• Leisure activities: Moreover, despite overall perceived safety increases, across the world, many consumers still prefer home-centered activities:
• Almost half (49%) of those surveyed plan on continuing to stream more entertainment to their TV after the pandemic.
• Just 23% of respondents feel safe attending an in-person event, and 43% say they will go to these events less often even after the pandemic; but 15% say they are committed to going even more.
• Around 45% of the respondents say they will be using public transit and ride hailing services less often.
• Shopping: One of the strongest indicators of permanent changes resulting from the pandemic is on consumer shopping behaviors:
• Roughly 50% of consumers surveyed indicate they will be doing more shopping online compared to 2019 (about 15% plan to do this less). 
• In April 2020, U.S. consumers ranked safety as the number one reason to use "buy online pickup in store" (BOPIS); however, in the latest survey, safety dropped to fourth replaced by "cheaper and faster than delivery," suggesting that a permanent trend is taking hold.

Key quote
"As we begin recovery from this dual-fronted crisis, certain consumer behaviors have permanently changed. Consumers won't necessarily snap back to old habits. As consumers learn more and experience more, we'll gradually get back to traveling, or mingling among large groups, but it likely won't be at the pre-pandemic levels. Other shifts are more systemic such as working, cooking and streaming from home and convenience through online commerce. They are likely here to stay."

-          Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte LLP

For more information, including the full survey findings, visit the "Global State of the Consumer Tracker."  Connect with us on Twitter at @DeloitteCB or on LinkedIn @AnthonyWaelter and @StephenRogers.

About Deloitte
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