Insight

Consumer pulse survey report | June 2020

How is spend changing as consumers venture out of their homes after lockdowns? What are their plans for summer travel?

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Scott Rankin

US Strategy Service Line Leader, Deal Advisory & Strategy, KPMG LLP

+1 617-988-1474

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Mark Schmeling

National Sector Leader, Consumer & Retail, KPMG US

+1 312-665-2620

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Julia Wilson

Principal, Advisory Strategy and ESG, KPMG US

+1 404-222-3511

As the country begins opening up for business, U.S. consumer sentiment is mixed, with many consumers uncertain of the future. The new normal is beginning to emerge, and we are anticipating that many of the changes in consumer behaviors we have seen during this time will have longer term implications for the future operating and business models for retailers and manufacturers.

COVID-19 economic impact is evolving

More than 30% of survey participants have had either a full or partial reduction of employment status as a result of COVID-19. However, more than half of those individuals have already returned to work. A better indicator of purchasing power may be household income. Our survey shows consistently across periods about 40% of households experienced a reduction in income.

Views on both the economic recovery and the return of consumer spend were mixed, but in June the survey showed a slightly more pessimistic outlook from respondents. Younger generations tended to be far more optimistic about economic recovery than their older counterparts.

Slightly fewer respondents (6% less) claimed a reduction to income in June than did in April. That may be the result of ramped-up stimulus and unemployment programs.

Impact on household income

Severity of impact to household income

_{Source: KPMG Consumer survey, fielded April 27,2020 – April 30, 2020 (2) KPMG Consumer survey, fielded June 4, 2020 – June 8, 2020. KPMG conducted a survey of 1,000 consumers across the United States and they were asked the question, “Please describe you current working arrangement” and “Please estimate the percentage reduction of your household income caused by COVID-19".}

“Here for now” vs. “here to stay”

In the April edition of the KPMG consumer pulse survey, participants expressed a significant pull-back of spend in discretionary categories like entertainment, restaurant and apparel. In the June edition, they still expected their 2020 spend to be down compared to 2019, but not nearly as dramatically as previously reported.

The April survey also looked at consumer behaviors emerging as a result of COVID-19, such as new models of buying. The June survey aimed to identify behaviors that continued even as survey participants ventured out of their homes for the first time in months or weeks. Some of the most frequently cited new platforms that may be “here to stay” include online grocery and delivery, online video conferencing and online fitness.

Consumers anticipate continuing with some moderate- and high-demand platforms used while sheltering-in-place.

Expected change in activity frequency

"Here for now"

High growth, moderate anticipation to continue

Videoconferencing platform	73%
Telemedicine appointments (mental health)	71%
Telemedicine appointments (physical health)	66%
Online or remote fitness class	75%
e-sports	74%

"Here to stay"

High growth, high anticipation to continue

Remote learning platform	76%
Online purchase to pick up in store	80%
Wellness app	90%
Remote fitness equipment	80%
Online content streaming	87%
Online games	84%

"Here for now, too"

Moderate demand, moderate anticipation to continue

Fast food restaurant drive through	72%
Restaurant delivery	73%
Restaurant curbside pick-up	66%

"Possibly here to stay"

Moderate demand, high anticipation to continue

Meal kit delivery	84%
Grocery delivery	73%
Grocery curbside pick-up	66%
Homemade meals	91%
Homemade coffee	93%

_{Source: KPMG Consumer survey, fielded June 4, 2020 – June 8, 2020. KPMG conducted two surveys of 1,000 consumers across the United States and they were asked the questions, “Have you or someone in your household done any of the following activities in the last 3 months?” and “Do you expect to do each of the following activities less frequently, equally frequently, or more frequently in the foreseeable future compared to before COVID-19?”}

Anticipated consumer summer spending

Predictions

As consumers look to the summer, most still expect visits to retailers to be lower compared to 2019 levels. They also expect significantly less leisure trips than prior years.

Compared to 2019, half as many consumers will take summer vacations in 2020, and half of those will only take day trips.

_{Sources: (a) KPMG Consumer survey, fielded April 27,2020 – April 30, 2020 and KPMG Consumer survey, fielded June 4, 2020 – June 8, 2020. In June KPMG conducted a survey of 1,000 consumers across the United States and they were asked the questions, “Do you plan on traveling this summer?”, “Where do you plan on staying during your overnight trips?” and “How do you plan on traveling to your destination? (b) Bankrate survey conducted April 2019 that asked the question “Do you plan to take summer vacation this year?”}

Consumer archetypes

In the April consumer pulse survey report, we introduced four archetypes: “Hit hard and cutting deep,” “Proceeding with caution,” “Hunkered down and saving,” and “Ready to roll”. We took a look back in June to see how these groups had evolved.

The June survey results show that the two archetypes that had reduced spend most dramatically in April expect their spend to come back somewhat over the summer months. The “Ready to roll” group was larger in June than the “Hit hard and cutting deep" group, which may indicate success of stimulus measures.

1. "Hit hard and cutting deep"

hardest hit by COVID-19
less able to deal with circumstances prior to pandemic
spending significantly less across categories
not optimistic about the future.

June 2020

Average age: 51

Average income: $50,000

April 2020

Average age: 51

Average income: $45,000

2. "Proceeding with caution"

also impacted by COVID-19 but not as significantly economically and still concerned about future
moderate income prior to pandemic, spending about the same
most unsure about the future.

June 2020

Average age: 45

Average income: $47,000

April 2020

Average age: 44

Average income: $60,000

3. "Hunkered down and saving"

not necessarily directly impacted by COVID-19
most financially able to deal with pandemic
spending less given concern for economic outlook
more pessimistic about the future.

June 2020

Average age: 53

Average income: $160,000

April 2020

Average age: 53

Average income: $110,000

4. "Ready to roll"

not directly impacted by COVID-19
moderate income, spending more across categories
most optimistic about the future, eager for social activities, but will still modify behaviors to maintain social distancing.

June 2020

Average age: 35

Average income: $82,500

April 2020

Average age: 33

Average income: $65,000

_{Sources: KPMG Consumer survey, fielded June 4, 2020 – June 8, 2020; KPMG Consumer survey, fielded April 27,2020 – April 30, 2020.}

The KPMG consumer pulse survey series explores key, emerging themes around consumer behaviors, purchasing patterns and the economy. Each survey asks 1,000 U.S. consumers, representing all demographics, timely questions about upcoming purchases and economic conditions. We conduct the surveys to help our clients understand consumers, uncover the signals of permanent change and create basis for transforming their businesses to meet customers where they are.