Mar 28, 2021

McKinsey survey: US consumer sentiment during Covid crisis

McKinsey
consumerbehavior
USconsumers
brandloyalty
Kate Birch
2 min
According to the McKinsey & Company survey, consumer optimism remains steady and there are signs of discretionary spend recovery with US consumers
According to the McKinsey & Company survey, consumer optimism remains steady and there are signs of discretionary spend recovery with US consumers...

McKinsey & Company’s latest US consumer sentiment survey shows optimism remains steady thanks to the rollout of vaccines and there are signs of discretionary spend recovery as lives slowly return to normal.

The survey was conducted in the United States from February 18 through 22, 2021.

According to McKinsey, as digital transformation, the move to a homebody economy, and shock to loyalty continue to play out, there are signs of spend recovery.

More than half of US consumers expect to spend extra to ‘treat themselves’ while out-of-home activity and spend intent is accelerating among those who have been vaccinated.

Economic optimism recovered slowly from late spring to early autumn 2020. Since October, around 40% of US consumers are consistently optimistic, while around 15% remain pessimistic.

The survey suggests overall spend is on a path to recovery with monthly credit-card spend showing shoots of growth in 2021. Stimulus payments and holiday pull-through have influenced recent growth.

More than half of US consumers expect to spend extra by treating themselves, with higher-income millennials intending to spend the most. Around half of consumers who plan to splurge say they are pandemic-fatigued and intend to spend soon, particularly on categories such as clothing, beauty, and electronics. The other half is cautiously waiting for the pandemic resolve itself, and then plan to spend on restaurants and travel.

The survey unsurprisingly shows that all retail categories have seen an increase in online penetration. Those retail categories with higher online penetration before COVID-19 saw a dramatic increase in spend online during lockdown, growing from 37 per cent to more than 80 per cent.

undefined

Brand loyalty impacted

While shopping behaviours changed and consumers naturally gravitated to those retailers who were digital innovators, those switching brand loyalty were mainly Gen Z and millennial consumers.

Those consumers cited convenience and value as the main reasons to change their shopping behaviour, but younger consumers are still looking for brands that match their own values.

At the beginning of the pandemic, consumers seemed to seek security in large
companies and leading brands, but the survey suggests growth in late 2020 and early 2021 was coming more from brands from smaller companies.

Share article