US consumer sentiment and behaviors during the coronavirus crisis

Amidst the Delta variant, US consumers exhibited strong optimism and spend in July and August, driven by higher-income and younger consumers.

Given the recent surge of the Delta variant, we will continue to track changes in consumer sentiment and behavior as the next normal continues to evolve.

Consumer optimism and spending have remained strong

High levels of optimism and spend through July and August, even as the Delta variant spread in the US, have been driven by higher-income and younger consumers (optimism at 57 percent and 59 percent; spending growth of 11 percent and 15 percent year over year relative to pre-COVID-19 respectively). Lower-income and older consumers are less optimistic (optimism at 36 percent and 35 percent), and lower-income consumers in particular are spending less (spend declined 9 percent year over year relative to pre-COVID-19). While the intent to continue to splurge is less now than it was in February, it is still strong among younger, higher-income consumers.

Omnichannel is ascendant and here to stay

Even as consumers go back to stores, with 5 percent growth year over year in August, e-commerce sales also continued to experience strong growth, rising by about 30 percent year over year. This has meant elevated online penetration of about 30 percent higher than pre-COVID-19. Omnichannel shopping is ascendant, with about 60 to 70 percent of consumers across categories shopping/researching both in store and online and social media influencing up to 40 percent of consumers in categories like jewelry, accessories, and fitness.

Disparate recovery across categories

Spend has been significantly elevated in several categories, including those associated with the homebody economy (consumer electronics, home improvement), as well as pet supplies and cosmetics. However, travel and out-of-home entertainment spending started to decrease in July and August after a strong recovery in Q2, likely driven by concerns around the Delta variant.

Five different types of channel and category performance have evolved over the course of the COVID-19 pandemic.
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Despite increase in out-of-home activity, consumers are cautious and embrace homebody economy

Out-of-home engagement has increased since February, especially social activities, indoor dining, and fitness. However, a majority of consumers state that the Delta variant has caused them to engage in out-of-home experiences either less or in modified ways. At the same time, consumers, especially those working from home, have continued to change their home environment and spend to improve it.

Loyalty shake-up continues

Consumers continue to change their shopping behavior, with three-quarters making some change and about 40 percent switching brands. This dynamic behavior is magnified among younger consumers and higher-income consumers. When asked why they switched brands, consumers indicate generational differences as well: for older consumers, the reason is value and availability, while for younger consumers, it is value and purpose.

Consumer behavior changed more among younger and higher-income consumers than other groups.
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These exhibits are based on third-party data provided in the United States between February 2019 and August 2021, as well as longitudinal surveys conducted between March 2020 and August 2021. Check back for regular updates on US consumer sentiments, behaviors, income, spending, and expectations.

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