Consumer spending, a major source of economic activity, collapsed as the first wave of the pandemic swept across countries in early 2020.
All of a sudden, consumers were forced to change behavior, companies to transform business models, and governments to adjust regulations. And just as the coronavirus has affected regions and individuals in vastly different ways, the economic impact has also been very uneven.
Employees able to work from home have maintained jobs and income, accumulating more savings while forced to cut back on spending from lock downs, travel restrictions, and health fears; others lost jobs and income or closed down businesses and have struggled to pay the bills. While there is reason to be optimistic for a robust recovery in consumer spending once the COVID-19 virus is controlled due to pent-up demand and a significant accumulation of savings, the pandemic, like other crises, will leave lasting marks.
Understanding what that means for consumer behavior and the recovery in consumer spending—a critical factor for the global economic recovery—is the focus of this report. Play Video Video How COVID-19 changed consumer demand In our analysis, we examine consumer spending in China, France, Germany, the United Kingdom, and the United States. We divide consumers into nine segments based on age and income to determine the size and shape of the consumer demand recovery.
Then, drawing on in-depth analysis of six case studies from sectors that cover almost three quarters of consumer spending and encompass a broad spectrum of consumer life, we determine how the mix of consumer demand is likely to evolve and which pandemic-induced behavioral changes are likely to “stick.”