Consumers around the world, including the UK, are universally pulling back on most discretionary spending and are radically changing their spending habits as economic optimism hits an all-time low.
According to the latest data collected on April 18th-19th by global consulting firm McKinsey & Company, 25% of consumers surveyed in the UK believe that COVID-19 will cause the economy to fall into a long-lasting recession.
As such, 36% of consumers say they are cutting back on spending with a further 36% saying uncertainty is preventing them from making purchases they would normally make.
This contrasts greatly with consumers in China where 56% expect the economy to rebound within 2-3 months and in the US where 35% are still optimistic of a rapid recovery.
Generally European consumers are much less optimistic, the exception being Germany where 24% expect the economy to bounce back within 2-3 months.
Consumers in the UK are starting to shift their behaviour as well, spending more time connecting virtually and consuming digital and live media. There has been a large increase in texting, messaging and chatting online as well watching live news and movies or reading the news online.
There has also been a recent increase in cooking and making home improvements.
In terms of changes to routine, 94% of UK consumers believe that it will be at least another two months before personal routines can start returning to normal. However, even after COVID-19, consumers expect to do less shopping in physical stores, traveling and attending events.
Amid the new economic reality, British residents are starting to feel the effect of the crisis on their incomes with 30% noticing a reduction in their income, 50% thinking their finances will be impacted for four months or longer and 44% being very careful how they spend their money as a result.