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PwC study hints consumer confidence will bounce back from Covid-19 crisis

Apr 09
 
Tags: PwC
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PwC study hints consumer confidence will bounce back from Covid-19...

Research from PwC has provided an insight into the decline in consumer confidence caused by the coronavirus outbreak, noting that public sentiment remains above the levels seen during the 2008-09 financial crisis.

The professional services firm conducted a survey of UK adults from March 20th to 22nd - after the government had requested people to work from home and practice social distancing, but before more strict constraints on movement had been implemented.

Based on the views of more than 2,000 people, the UK-wide poll showed that consumer sentiment declined by 29 points between December 2019 and March 2020, dropping to -26. This was the largest quarterly downturn in more than ten years.

The current level of -26 is higher than the -51 recorded in October 2008, directly after the collapse of Lehman Brothers, and also the -42 figure noted in early 2012.

The drop-off in the first three months of this year marked a distinct change from the final quarter of 2019, when net sentiment improved from -7 to +3, reflecting high employment, real wage growth and political stability.

Detailed trends highlighted in the results showed that the steepest decline in sentiment - of 58 points - occurred among those under 28 years of age. In the over-65 age group, by comparison, there was a fall of 11 points.

PwC said this is a reflection of the fact that younger people are more exposed to the industries hardest hit by job insecurities.

Lisa Hooker, consumer markets leader at the firm, said there are still questions about how consumer sentiment will hold up if the current lockdown measures continue for a prolonged period.

"But these results do give confidence that consumer sentiment, and therefore spending intentions, have the potential to bounce back quickly once the crisis abates," she added.

"Which retailers and brands consumers choose to return to will depend on how they communicate with and treat their customers and staff today, and it's crucial that the industry remains mindful of how to approach the recovery period, when it eventually comes."

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