Deloitte maps out the sentiment of European consumers

10 June 2020 5 min. read
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Consumers across Europe are decreasingly anxious about the Covid-19 crisis, according to new Deloitte analysis. Health concerns appear to outweigh financial worries in the region.

Deloitte has been tracking the global consumer response to the crisis every two weeks since mid-April, looking to keep tabs on how sentiment is evolving in response to developments across the world. The most recent survey responses were gathered at the turn of this month.

Among the things being measured among consumers are the level of anxiety, areas of concern, and willingness to spend among. The research shows that consumers in Europe were increasingly anxious about the crisis back in April, more so in the worst hit countries such as Spain, Italy, the UK and France.

Germany and the Netherlands have remained relatively less anxious since then, currently ranking as the most 'relaxed' countries on Deloitte’s global index. In fact, European countries make up six of the ten least anxious countries according to the Big Four firm, with countries like Belgium, France and Ireland all reporting lower levels of concern compared to weeks before. Even consumers in hard-hit economies Spain and Italy are less concerned now than they were in previous weeks.

Ranked by anxiety score

The low levels of anxiety are being caused partly by the fact that European consumers are among the most financially secure. Deloitte examined whether consumers were concerned about upcoming payments, and whether they are delaying big purchases, both as indications of financial concern.

The Netherlands appears to be the most financially secure, followed by Germany. Belgium, the UK, Ireland, Spain and Italy follow in order of increasing financial concern, although Deloitte places all these countries within the ‘financially secure’ bracket. Only Indian and Mexican consumers fall in the financially insecure bracket, while China falls just on the border.

Health and family

Most concerns among consumers in Europe relate to personal health and the health of friends and family. Once again, the Netherlands and Germany rank on top as the most health hopeful countries, while most other European countries border on being health anxious.

Other major economies such as Japan, South Korea and Australia are at par with the rest of Europe in terms of health anxiety, while markets such as the US and Canada are more anxious. Spain is an outlier for Europe in this regard, recording a high level of health anxiety, behind only China, Mexico and India.

Health and financial matrix

Overall, Deloitte found consumers across the globe to remain subdued in their activities. Less than a third feel comfortable going to a restaurant at this point, while just over 20% feel safe attending events. Returning to the workplace is also among top concerns.

On the other hand, an increasing number of consumers now feel safe going to the store. A growing share of people are also warming to the idea of staying in a hotel, or taking a flight, although these numbers remain low at an absolute level. The varying levels of anxiety combined with financial concerns are reflecting on the nature of products and services that are drawing consumer spending.

The underlying trend has been a shift towards the basics, with luxury and discretionary spending falling across the globe. People are increasingly spending on groceries, household goods and medicines, while spending on alcohol and restaurant takeaway has seen a marginal decline. Meanwhile, spending on apparel & footwear, electronics and books has taken a significant hit, causing a sales crisis for many businesses.

Not surprisingly, a growing share of purchases across the board have moved online, a development which is causing a boom in e-commerce segments.

Avarage net spending intent over the next four weeks

When it comes to discretionary spending, consumers in Germany and the Netherlands remain among the markets with the most spending intent, although there has been a considerable decrease in these markets as well. Other European markets such as France, Italy, Spain and Ireland are all contending with lower discretionary spending. Given that luxury goods has been a thriving economic segment across Europe, squeezed discretionary spending comes as a blow to many markets.

Discretionary spending is one of many indicators that show that economic conditions remain far from normal at this point. As pointed out by Deloitte partners Stephen Rogers and Leon Pieters, economic recovery is likely to be an extended process.

“In the matter of weeks, the ordinary act of going to the store or taking a flight became more fraught with concern. As economies attempt to reopen, it’s likely not until the public feels safe that consumers will return to behaviors that we only recently took for granted. In fact, we do not expect to see a return to normal, or even a new normal, until total concern descends from its elevated level and financial concerns overtake those of immediate health and safety,” said Rogers and Pieters.