Consumers retreating as Covid-19 spreads

Health concerns generally exceed financial concerns in the US, with more than half of respondents concerned about health and nearly a quarter worried about finances, according to a recent Consumer Tracker report from Deloitte. Meanwhile, only a third of US consumers feel safe going to the store right now – according to the survey which was conducted in mid-April.

“Health risk and economic behavior are tightly intertwined. As long as personal health and financial concerns persist, consumer spending is likely to be restrained, except for essentials,” said Seema Pajula, vice chairman, U.S. industries and insights leader, U.S. consumer industry leader, Deloitte.

Of course, beyond fearing for their health, many consumers can’t go to stores even if they wanted to, as most non-essential stores are closed in Covid-19-impacted areas.

Consumers in China and India were most concerned about their own and their family’s health. Concern in the US remained elevated, with 64% worried about the health of others and 52% worried about their own health. Dutch respondents were least concerned about health amid the pandemic.

Percent of consumers concerned about health, employment, and finances

Overall, 42% of respondents with a job were concerned about losing it, while 35% of US respondents were worried about losing their job. Respondents in hard-hit Spain were most concerned (62%), while the French and Dutch were least concerned about losing their job (28-29%).

Twenty-four percent of Americans were concerned about making upcoming payments, while 42% were delaying large purchases. Half of respondents in Spain and India were concerned about making upcoming payments, while more than half of respondents in Canada, France, Italy, Spain, China, and India were delaying big purchases.

Only 34% of US consumers felt safe going to the store, which was approximately the overall average (35%) among the 13 countries surveyed. Respondents in Japan (17%) and Spain (25%) felt least safe going to the store, while Dutch (45%) and Chinese (47%) consumers felt safest.

“Many economies are driven by consumption, so it’s not until the public feels safe that consumers will likely return to behaviors that were only recently taken for granted and economies, in turn, return to strength,” Pajula added. “We’ll be closely monitoring these attitudes as economies begin to re-open.”

US consumers are facing a great deal of economic uncertainty, with an unprecedented 30 million people filing for unemployment in the past six weeks. As such, a majority intend to curb discretionary spending, spending less on items such as travel and eating out (both of which are less feasible anyway). US consumer intend to spend more on necessities such as groceries and household goods, with 55% reporting stockpiling.

The Deloitte survey also found that nearly half of US consumers were willing to pay more for convenience to get what they need. However, only 19% of respondents plan to purchase groceries online in the next four weeks. This could be linked to a lack of capacity to meet a surge in demand, according to the report.

Source Article