McKinsey’s latest update of Global surveys of consumer sentiment during the coronavirus crisis

As governments and organizations continue to work toward containing COVID-19 and stem the growing humanitarian toll it is exacting, the economic effects are also beginning to be felt. We are tracking consumer sentiment to gauge how people’s expectations, incomes, spending, and behaviors change throughout the crisis across multiple countries over time. Please check back regularly for updates.

About the guest author(s): Shruti Bhargava is a senior expert in the Philadelphia office; Courtney Buzzell is a specialist in the Waltham office; Tamara Charm is a senior expert in the Boston office; Resil Das is a specialist in the Gurgaon office; Michelle Fradin is a consultant in the New York office; Anne Grimmelt is a senior expert in the Stamford office; Janine Mandel is a consultant in the Denver office; Kelsey Robinson is a partner in McKinsey’s San Francisco office, where Sebastian Pflumm and Anvay Tewari are consultants; and Christa Seid is a consultant in the Seattle office.The authors wish to thank John-Michael Maas for his contributions to this article.

Our global survey series across 40 countries continues to track consumer sentiment through the crisis (see sidebar). The following exhibits focus on a subset of 12 core countries, selected because of their economic significance and the impact that COVID-19 has had on their populations.

1. Consumer sentiment

Consumer optimism has fallen across the Americas and Europe since mid-March, while most Asian countries have maintained or increased their level of optimism.

European consumers were the least optimistic at the beginning of the crisis, consistent with these countries’ lower consumer sentiment measures before COVID-19. However, levels of optimism have dropped since mid-March by 25 percent to 40 percent in the United Kingdom, France, Spain, and Italy. In contrast, Germany’s optimism has remained steady since mid-March at a higher level than that of its European neighbors.

Since mid-March, McKinsey has fielded consumer surveys, now in 40 countries around the globe, to understand the impact of COVID-19 on consumer sentiment and stated behavior. Surveys are conducted online in local languages and are repeated weekly, bi-weekly, or monthly depending on the region. Results are weighted on a country basis for representative balance of the consuming class, based on variables including age and socioeconomic status. 1

Although US consumers were more optimistic in the middle of March, optimism dropped by 10 percent in last week’s measure, as shelter-in-place orders continue throughout the country.

China and India, two countries with high levels of optimism even before the COVID-19 crisis, have seen optimism increase since mid-March by around 10 percent each.

Although US consumers were more optimistic in the middle of March, optimism dropped by 10 percent in last week’s measure, as shelter-in-place orders continue throughout the country.

China and India, two countries with high levels of optimism even before the COVID-19 crisis, have seen optimism increase since mid-March by around 10 percent each.

2. Consumer income

Many consumers across countries expect an income decrease in the next two weeks. China and India are again exceptions, with a portion of consumers expecting an increase in income.

Between 25 and 63 percent of consumers globally expect their household income to continue to fall over the next two weeks, while few (less than 10 percent in most countries) expect an increase. Chinese and Indian consumers are the most optimistic, with 25 and 18 percent respectively expecting salaries to increase—however, 47 percent and 55 percent still expect a decrease. The next tier of countries includes the United States, the European countries, Japan, and Korea, where 30 to 51 percent expect a decrease. In the final tier of countries, Brazil and South Africa, more than 60 percent of consumers expect decreased income.

3. Consumer spending

Pockets of optimism remain across the globe, driving expectations of increased spending in some regions.

Chinese consumers’ optimism results in a net increase in expected future spending, a situation also observed in Saudi Arabia, Indonesia, and Nigeria. Other countries, including Colombia, Chile, Brazil, Portugal, and Poland, have relatively low optimism but still expect to increase spending—potentially due to stocking-up behavior driven by stay-at-home orders. Most European consumers (including those in Italy, Spain, France, and the United Kingdom), in addition to Korea and Japan, are less optimistic and, as a result, expect to spend less. While US consumers are more optimistic, they match European consumers’ reluctance to spend; in contrast, Canadian consumers are less optimistic and show the least willingness to spend among countries surveyed.

4. Category spending

Globally, consumers are still spending (and sometimes spending more) on basics such as food, household supplies, and personal care items, as well as on home entertainment. As countries move through the contagion curve, we see increased momentum across select categories.

Consumers are dramatically pulling back on discretionary spending in most countries excepting China. Some of the categories showing the most precipitous declines include restaurants, apparel, footwear, jewelry, accessories, travel, and entertainment out of home. This behavior is consistent with large-scale shelter-in-place orders around the globe as well as consumers’ stated expectations of reduced spending.

Consumers expect to spend more on basics such as groceries, household supplies, and in some countries personal-care items. Consumers are also trying new brands when the ones they are used to are unavailable. Bigger brands with more robust supply chains are growing faster as a result, giving them a unique opportunity to earn consumer trial and loyalty.

As countries progress along the contagion curve, there are pockets of increased spending. Chinese consumers are beginning to spend more across a few categories outside of basics, including pet-care services, fitness and wellness, skin care and makeup, and basics for childcare. Their shopping habits before, during, and after the COVID-19 peak show that shopping behavior after the peak resulted in more than 30 percent lower traffic but larger basket sizes for food purchases, and depressed traffic and consumption for apparel and department stores (40 to 50 percent below pre-COVID-19 levels). In South Korea and Japan, food takeout and delivery are showing positive momentum.

5. Expectations of duration of personal impact

Consumers globally expect long-lasting effects of COVID-19 on their personal routines and finances.

More than 75 percent of consumers globally expect the impact of COVID-19 on their routines and finances will be felt for more than two months, and about 50 percent expect the duration to be for more than four months. Even in China and India, where more than 50 percent of consumers are optimistic about the overall strength of their economies to rebound, about 90 percent expect it will be more than two months before routines go back to normal, and almost as many expect their finances to be impacted for a similar duration. In Germany, while 95 percent of consumers expect a lengthy impact on their routines, fewer (58 percent) expect this duration of impact on their finances. In contrast, almost 90 percent of consumers in Japan and South Korea expect disruptions to their finances to last more than two months.

6. How time is spent

Across 11 of our 12 countries, consumers continue to shift their time to home-based activities including cooking, news consumption, digital entertainment, and digital social connection. China is the only country where these activities are decreasing in favor of working more.

Most consumers globally expect to spend less time working and more time consuming entertainment, including digital and video content, news, and social media. Consumers expect to spend more time on domestic tasks, including cooking and home improvement. A notable exception is China: as it emerges from the worst effects of the pandemic, consumers plan to spend more time back at work and less time on leisure and entertainment.

7. Activity adoption and growth

Digital and low-touch activities are growing, attracting both new and increased users during the pandemic. Consumers expect some of these activities to enter their “next normal.”

During the pandemic, consumers have taken up new ways to learn, work, entertain themselves, procure essentials and non-essentials, connect with others, and increase wellness while at home.

Usage of online streaming and personal video chats has increased rapidly across most countries. Online fitness, including the use of wellness apps, has grown in almost all countries.

Consumers have also expanded their usage of restaurant and grocery delivery as new ways to procure food safely with limited in-person interaction. Similarly, curbside pickup has grown in popularity: restaurant curbside pickup has attracted new users in the US and Germany, while trial of store curbside pickup has increased in the US, UK, Spain, and Italy.

Consumers globally have replaced some of the in-person aspects of their work and healthcare with digital solutions. Many have begun using physical and mental telemedicine since the crisis started, with more than 50 percent of the growth of these activities coming from new users. Similarly, videoconferencing for both work and personal uses has gained in popularity across the countries surveyed.

8. Long-term outlook for new behaviors

Consumers across countries remain hesitant to return to international travel, large public gatherings, and trips to the mall once the effects of COVID-19 decrease. Across most countries, consumers say they will increase online shopping.

Looking ahead to the “next normal,” consumers remain hesitant to return to some of the activities that were part of their daily life before the start of the pandemic. Consumers globally do not intend to undertake international travel soon, while consumers in several countries—with the exception of Germany and France—plan to restrict domestic travel as well. Most consumers expect to shop less frequently in physical stores for items other than grocery, simultaneously shifting that spending online.

While many consumers have started shopping online for groceries during the pandemic, future intent for online grocery shopping is mixed: consumers in the UK, Italy, and Japan intend to do more online grocery shopping, while American, German, French, and Spanish consumers intend to do less. In contrast, consumers in all countries except the UK expect to return to physical stores once COVID-19 has passed.

We will be tracking consumer sentiment to gauge how people’s expectations, perceptions, and behaviours change throughout the crisis. In addition to the exhibits embedded here, please see our country-level survey data, which will be regularly updated.

Or click directly to see one of these countries in our survey: Argentina, Australia, Belgium, Brazil, Canada, Central America & the Caribbean, Chile, China, Colombia, France, Germany, India, Indonesia, Italy, Japan, Korea, Nigeria, Peru, Poland, Portugal, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, the United Kingdom, or the United States.

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