With Covid-19 continuing to cause major economic disruption around the world, a new study from McKinsey & Company has revealed that although American consumers are relatively optimistic about the economy’s recovery, many are planning on cutting their spending.
46% of U.S. consumers surveyed by McKinsey & Company stated that they will be reducing their spending over the next two weeks due to the uncertain economic climate created by the ongoing health crisis, while 44% said that they will delay purchases.
In particular, discretionary purchases, including apparel, footwear and home furnishings, as well as travel and out-of-home entertainment, will be hit hard. In other categories, such as in-home entertainment, groceries and household supplies, U.S. consumers are actually expecting to spend more as they attempt to deal with social distancing measures.
Consumers are also anticipating that their spending will be focused online in the coming weeks, a shift being driven principally by Gen Z and millennials, along with higher-income consumers.
And this isn’t the only change occurring in consumer behaviour during the coronavirus crisis. 15% of consumers, for example, are using new websites to shop for basics, while 13% have switched their primary grocery store. Curbside restaurant and store pick-up have been adopted by 10% and 8% of consumers, respectively.
With consumers giving generally positive feedback concerning these experiences, many analysts believe that the newly adopted behaviours will continue once the Covid-19 crisis has significantly slowed down.
Overall, American consumers remain relatively optimistic about the possibility of economic recovery following the pandemic. 37% currently expect the economy to rebound within two to three months, while only 13%-26% of their European counterparts agree. Higher income consumers making more than $100,000 per year were the most optimistic U.S.-based consumers.
American optimism has, nevertheless, taken a dip over the past few weeks and continues to trail behind high hopes in China, where the Covid-19 pandemic began at the end of last year. A major cause for concern is the growing number of re-infected patients in several countries.
McKinsey & Company’s findings are based on survey data collected from U.S. consumers between March 30 and April 5, 2020.
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