Less than one in five consumers optimistic
UK consumer confidence in the economy has fallen as the impact of Covid-19 starts to be felt. Only 19% of British consumers now have an optimistic view of the economy according to the latest data on consumer sentiment from global consulting firm McKinsey & Company collected on March 28-29, 2020. This represents a decline from the previous week.
British consumers are starting to feel the effect of the crisis on their incomes with 35% noticing a reduction in their ability to work. Nearly half are spending money more carefully and cutting back on expenses as a result. 70% believe that their routine will be impacted for at least two months or more by the Covid-19 situation and are planning to continue to reduce their spending.
This is in stark contrast to consumers in the US and China where almost half of consumers expect the economy to rebound within a couple of months.
The intent to spend less has been across all categories but the most dramatic drops have been seen in purchases for travel, auto and apparel. In the select categories where consumers expect to spend more (grocery, home-based entertainment and household supplies), UK customers have switched to online shopping to make these purchases.
Consumers in the UK are starting to shift their behaviour as well, spending more time connecting virtually and consuming digital and live media. There has been a large increase in texting, messaging and chatting online as well as watching live news or reading the news online.
Key findings from the UK:
- Less than 20% of British consumers have an optimistic view of the economy – a decline from last week
- Nearly half of consumers are spending money more carefully and cutting back on expenses
- And nearly half of UK residents plan to continue reducing their spending in the next 2 weeks
- 70% expect their routine to be impacted for 2+ months by the Covid-19 situation
- Spending is declining across most categories with large drops in travel, auto and apparel
- Consumers have switched to online shopping for household essentials
- UK consumers are spending more time connecting virtually and consuming digital media