McKinsey & Company outlines covid-19's impact on consumers

Based on large surveys of Australians in April and May, McKinsey & Company has outlined how the Covid-19 pandemic is impacting the economy, consumer sentiment and shopping behaviour. 

According to the insights of the global strategic consulting firm, just one fifth of Australians are upbeat about the pace of economic recovery. They believe Australia’s economy will rebound within 2-3 months and grow just as strong or even stronger than before the Covid-19 outbreak. 

A roughly equal group of people is pessimistic, expecting a lasting impact on the economy and a lengthy recession. The largest chuck of Australians however have an in between view, expecting an impact for 6-12 months, but are unsure as to how quick the economy will return to growth. 

Around two thirds of Australian are convinced that their personal finances will be impacted for more than two months, with one third believing the impact will be felt for seven months or longer. 

Not surprisingly therefore, more than a third of consumers are cutting back on their spending, as uncertainty about the economy and their own job is preventing them from making purchases deemed not essential, such as groceries. As it stands, one fifth of Australians are concerned about losing their job. 

Consumer spending is decreasing in nearly all categories, except groceries and at-home entertainment.

Amid the lockdown and physical restrictions, the online channel is booming. Over the next two weeks, spending on online at-home entertainment such as Netflix and on demand streaming, and non-food child products will continue to grow. Meanwhile, spending on furniture and jewelry continues to take a large hit, both offline and online.

Post crisis

In terms of shopping preferences, price awareness of consumers will rise in the post covid-19 era. 

Post crisis, Australians also expect to use less public transport and shift to walking or driving their own car.