Covid-19 greatly impacting consumer sentiment, behavior

25 March 2020 Consulting.us

Consumer sentiment and behavior is shifting dramatically as the Covid-19 pandemic deepens in the US, according to a recent survey from L.E.K. Consulting and Civis Analytics. The survey polled 2,600 US consumers on March 18, 2020.

How severe consumers perceive the outbreak to be has a big influence on consumer sentiment, driving spending patterns and other behaviors. Eighty-nine percent of consumers said their geography was affected to some degree by the outbreak, roughly evenly split between the ratings of limited, moderate, bad, and critical.

Consumers were also found to be (rightly) pessimistic about the economy, with 80%-90% expecting a recession within the next year.

Travel spend has been hard hit, with a -50% to -75% reduction in total planned spend due to avoidance or cancellations. Post-outbreak, the majority of respondents expect their travel spend to remain dampened after containment – which may be influenced by a high level of uncertainty around jobs and income.

US consumer conceptions of Covid-19

Other consumer spending has also changed in predictable ways due to mounting restrictions on movement and group gatherings. Dining out, gyms, out-of-home entertainment, and consumer electronics have seen the largest declines, according to the L.E.K. survey. Taxis, takeout/delivery, and nonessentials such as beauty and fashion have also been depressed by the pandemic.

The categories that have seen boosted spending have also been unsurprising. Medical supplies and at-home fitness have seen a strong boost in monthly spend, while groceries, pet products, and at-home entertainment have also seen increases. Online spend is also on the rise, growing by 10%-30% across grocery and non-grocery purchases.

The survey found consumers are increasing in-home activities, with an increase in cooking, TV watching, social media browsing, and home exercise. Consumers are meanwhile limiting outside-of-home social gatherings due to government restrictions, as in the case of bars and restaurants, gyms, and public events.


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