Friday, May 24, 2024

Consumption Is Withheld And Recovery Is Delayed

The uncertainty retracts to the consumer. And that’s one of the variables that slows down recovery . The first symptom has been the 0.5% decline in gross domestic product (GDP) in the first quarter, as announced by the National Institute of Statistics (INE) last Friday.

The calendar in the vaccination process and the succession of waves of the covidcontinues to undermine the mood of consumers who see how the economic recovery extends beyond 2021. 54% of the Spanish consulted consider it this way, according to the report ‘Future Consumer Index’ entitled ‘Deconstructing the consumer in a post-vaccination environment’ prepared by the consulting firm EY.

This percentage is four tenths higher than in the survey carried out in October, compared to Germans and Americans who are more optimistic . The government itself admitted in the revision of its economic forecasts that the recovery will be delayed at least until the second quarter due to the third wave of the virus.

The pandemic continues to worry, not only because of the impact it is having both on the economic situation (for 73% of them) and on the health of families (61%), but also because of how it is affecting the way of life.

In this environment dominated by uncertainty, the tendency to save continues to grow , which does so by five points, while 42% say that their income continues to decline and 73% do not consider that this income will improve in the next 12 months. The savings rate was at its highest level since 1999, according to the INE.

“The Spanish economy needs a consumer willing to return to his routine and recover his spending levels and this seems to not come until the vaccination process gains momentum and the majority of the population is immunized.

Meanwhile, we are facing a new paradigm in which consumers have not only increased their consumption at home, but are also beginning to build their lifestyle around their home ”, explains Javier Vello , partner in charge of the sector of ‘ Consumer Products & Retail ‘by EY.

From the conclusions of the survey, the predisposition of consumers to measures such as a health certificate is also deduced , with six out of ten respondents who are in favor of using the plane or a cruise ship, as well as going to shows, hairdressers or gyms without being already vaccinated is a requirement to access. In these types of activities where social distance is difficult to achieve, it is where the consumer continues to feel uncomfortable.

But, in addition, it lowers the level of “comfort” by six points in activities such as going to a supermarket or grocery stores. On the other hand, it improves the feeling of security when going to work and school.

And in this context, digitization advances . “The consumer continues to move towards greater use of digital channels, reducing their visits to physical establishments, reducing their spending on non-essential products (such as fashion or cosmetics) or, even, is willing to change brands to support the economy or local businesses.

The awareness we have been talking about is reflected in a citizen more responsible and concerned about their physical and mental health, paying more attention to issues such as food, quality time and social and environmental impact . On the other hand, the figures show a more cautious and economical consumer ”, explains David Samu , partner in charge of EY-Parthenon.

The ‘Future Consumer Index’ report periodically monitors changes in consumer sentiment and behavior, identifying new consumption patterns. For this edition, more than 14,400 consumers from 20 countries were interviewed during the first quarter of 2021, of which 530 are Spanish.

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