Most Americans expect the coronavirus outbreak to trigger a recession, according to a survey by L.E.K. Consulting and Civis Analytics, which also found changes in how shoppers are spending on food, pets and travel.
The survey was based on the responses of more than 2,600 consumers, and showed that between “80 percent and 90 percent of American consumers said they expect a recession within the year in light of COVID-19,” while 89 percent felt that their “geographic area is affected by the outbreak.”
The purpose of the survey is to help businesses by providing consumer insights. L.E.K. Consulting said in a statement that while the “true net effect of the outbreak is impossible to determine at this point, we believe moment-in-time snapshots are helpful, and we will endeavor to provide those.”
Manny Picciola, managing director at L.E.K., described COVID-19 as “a human and social crisis” and said since businesses “play such critical roles in employing, supplying and responding to individuals and society, we think it’s important to contribute insights on what consumers are thinking, how their spending is changing and how they can be better served.”
In regard to travel, 89 percent of respondents who noted that they are being affected by the COVID-19 outbreak, “have already canceled or ruled out between 50 percent and 75 percent of their 2020 travel spending.” L.E.K. said even those few respondents “who said their area isn’t affected are dropping their 2020 travel spend by more than a third [37 percent].” This includes expenditures on air travel, lodging and hotels, rental cars and cruises, among other types of spending.
And similar to prior surveys of shoppers, consumers are doling out significantly more money on medicine and medical supplies (up about 20 percent), at-home entertainment (up 15 to 20 percent), groceries (up 15 to 20 percent) and pet supplies (up 10 to 15 percent). At-home fitness spending is up about 35 percent.
“And consumers said they anticipate their online grocery spend to reach 40 percent of their total grocery spend if the outbreak worsens, and that their online non-grocery spend will reach 45 percent,” authors of the report noted.
“We are in truly unprecedented times, with a level of uncertainty that many of us have never experienced,” said Ellen Houston, managing director of Applied Data Science at Civis Analytics. “Data can help us regain at least some control, allowing us to understand not only where people’s heads are at right now, but eventually predict where people’s heads will be — meaning businesses can make better-informed decisions about the future.”
Maria Steingoltz, managing director at L.E.K., said as restrictions and social norms evolve in response to COVID-19, “consumers are of course adjusting their broader behaviors, reporting to us more ‘at-home’ activities like cooking, watching TV, social media browsing and exercising at home. These changes create a need for brands to explore how they can meet consumers where they are and engage with them in novel ways, like live digital fitness classes.”
For more WWD business news, see: