Consumers will reduce their spending budget on luxury articles and holidays, after the end of lockdown
01 de April de 2020
01 de April de 2020
- The lecturer at EAE Business School, Pablo Contreras, has drafted a report entitled “The impact of coronavirus on moods , habit s and consumption ”, which presents the data gathered in an online survey of 675 people between 20th and 25th March. The report reveals that 14% of the people surveyed think that it is quite probable that they will lose their job, while 70% expect their income to fall, with 29.2% predicting a ‘large’ drop and 40.4% expecting a ‘slight’ decrease.
The potential income-related consequences of the Covid 19 crisis will have repercussions for consumers, with 75% of the people surveyed saying that they will reduce their level of consumption in the months following the lockdown. “It is interesting that this percentage is higher than the proportion of people who expect their income to fall, as it indicates that there will be a greater level of caution with respect to spending in general”, explained Pablo Contreras. The worst affected items will be premium or luxury goods (80% of the people surveyed) and the holiday budget (70% of those surveyed), with 41% saying that there will be a ‘large reduction’ in the latter case. “We’ll have to wait and see what the drop in the holiday budget will mean. Will people simply not take holidays, or will they take shorter, more modest breaks, or stay in Spain rather than going abroad?”, reflected Pablo Contreras.
In contrast, the budget that consumers allocate to healthy eating will be the least affected (32.1% of the people surveyed), with 60.6% saying they will maintain their spending in this respect and 7.3% saying they will increase it. Sporting activities will also remain among consumers’ priorities consumers, with 40% expecting to reduce their spending on such services and 56% saying they will maintain it. The budget allocated to leisure activities and eating out will fall for 65% of the people surveyed.
These statistics reveal a mood among consumers that has clear repercussions on household consumption expectations. The prevailing feeling among consumers is uncertainty, for 64.3% of the people surveyed. “Uncertainty is the feeling that has the biggest impact on consumption, as it fosters caution in spending, particularly in terms of large purchases. It also leads to consumers being more rational and less impulsive, focusing more on price”, explained Contreras. However, there is no clear link with a feeling of fear as, despite reports of people infected and deaths, just 26.5% of those surveyed said that they feel quite (21%) or very scared (5%). Sadness is not a prevalent feeling either, with just 17.5% saying that they feel really sad. In terms of safety, 5% said that they feel very unsafe and 22% quite unsafe. It is really interesting that the report reveals that almost 50% of those surveyed feel upbeat, with 6% very upbeat and 43% quite upbeat. “People are showing a great deal of resilience and mental strength”, he added.
In terms of age, younger people display a higher percentage of fear, uncertainty, apprehension and low mood in general. Just 26.2% of the people surveyed under 25 years old said that they felt upbeat, compared to 50% of people over 36. “This data reveals clear trends, although we will have to monitor their evolution, because consumers’ moods and expectations are sure to keep evolving as the lockdown continues”, emphasized Contreras.
Moreover, 48.2% of the people surveyed think that companies are contributing to help respond to the crisis. A slight majority of the people (56.1%) say that they know which companies are contributing. In fact, there is a broad consensus that companies should strive to contribute during the crisis. A total of 57.8% of the people surveyed do not consider it right or logical that companies make temporary redundancies during the crisis.
Lastly, the report also reveals that the most widely used media for keeping up-to-date with the crisis are digital media, which is used by 88.7% of people, followed by television, used by almost 85%, and social media, used by 68%.
According to 80% of the people surveyed, the lockdown will be extended beyond 15th April. The 30th April is expected to be the most probable date for the lockdown to end, with 36.1% of responses. However, almost 45% of people expect the lockdown to last even longer.