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Consumer Sentiment - November 2020

Lockdowns and restrictions hit consumer sentiment but can retailers look forward to December?

Recent measures to combat the spread of the coronavirus (COVID-19) pandemic appear to have significantly impacted consumer sentiment. Conducted between 6-8 November 2020, and surveying 2,087 people, our latest index shows a significant drop in consumer sentiment since September, falling from -1 to -10. This is the sharpest fall we’ve seen since March 2020, when it fell to -26 from +3 in December.

Back in September, we had seen sentiment recover to near-pre-pandemic levels across all demographics and regions. Despite just emerging from a national lockdown, many UK consumers had disposable money and were willing to spend. Confidence was actually higher than it had been in September 2019.

So, what's happened to consumer sentiment?

Fast forward two months, and with England in a second lockdown, Wales exiting its firebreak, and Scotland and Northern Ireland still subject to significant restrictions, we’ve seen a consistent fall in confidence across all regions.  

But the big variation in sentiment comes when comparing age groups. Under 25s have seen the largest fall in confidence, dropping 27 points (+29 to +2). However, on balance, they remain the most positive age range at +2, followed closely by 25-34 year olds at +1, who themselves saw a significant decline (-11) in this survey. In fact, across the 25-54 year olds age ranges, there have been falls of between -9 and -11 points. Those over 55 years old seem to have been largely unaffected, remaining almost unchanged at -1.

Elsewhere, in a separate survey of 2,003 adults across the UK between 5-6 November, we asked if people agreed with the lockdown or current restrictive measures. The majority of people (54%) agreed that the closure of non-essential shops was an important restriction, with only 22% disagreeing. So while we’ve seen a drop off in sentiment, people clearly agree with the reasons for doing it.

Little effect on the older population, a big impact on working ages and the young

These results suggest that the lockdowns and tightened restrictions have barely affected the fortunes of those over 55 years old. They have seemingly had to make little to no financial sacrifices. When asked how they had been affected since the start of the pandemic in March, just 13% of over 65 year olds had either lost any of their income or had to make financial compromises, compared with over half of under 35 year olds.

For the first time, 45-54 year olds are the most negative age range. This could suggest that these restrictions are affecting older families more than others. Although such a marked drop off across the working-age ranges (25-54 year olds) suggests that they’re carrying the brunt of the impact from any restrictions. 

Young people are the most volatile group in the results. But they’re also often the most resilient. Despite the huge drop in sentiment in our most recent survey, we saw confidence recover rapidly among the under 25s after the last lockdown lifting. We’re likely to see sentiment bounce back in this group over Christmas as they respond positively to announcements around vaccines, mass testing, and returns home from university, as well as a general increase in casual jobs over the festive period.

What does this all mean for retailers?

Our previous surveys show how resilient consumer sentiment is, and in particular how volatile it can be among the younger age groups. With this survey conducted before the announcement of a potential vaccine, we may see an increase in confidence in the run-up to Christmas. 

With most people still either unaffected financially or saving money, there is the potential for ‘pent up spend’ once lockdown is lifted in England or restrictions are loosened elsewhere. 

Now is not the time for retailers to panic. Those that can hold their nerve and prepare for a late shopping surge may be the ones that ultimately benefit from a last-minute bounce in sentiment. 

Contact us

Lisa Hooker

Lisa Hooker

Leader of Industry for Consumer Markets, PwC United Kingdom

Tel: +44 (0)7802 882562

Kien Tan

Kien Tan

Director, Retail Strategy, PwC United Kingdom

Tel: +44 (0)7880 552726

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