Monday, June 6, 2022 12:38 PM
NEW YORK—How are U.S. consumers shopping and spending, and what does it mean for companies? That is what McKinsey & Company sought to find out in the survey behind its latest Consumer Pulse report. What the consulting firm discovered is that, across America, people have simultaneously embraced new behaviors and reverted to old ones.
“Two years into the pandemic, people across the country have discovered that they like shopping online, but they’re also going back to brick-and-mortar stores,” the firm noted in its recent report
“They’re venturing out of their homes again, but they’re continuing to spend money on home improvement. And—in what could be boon or bane for manufacturers and retailers—today’s consumers are quite willing to abandon their once-preferred brands in favor of new ones that offer value or novelty.”
The Consumer Pulse survey, which was in the field between Feb. 25 and March 1, garnered responses from more than 2,100 U.S. adults (sampled and weighted to match the general U.S. population). The survey results, combined with third-party data on consumer spending, provide insights into how U.S. consumer sentiment and behavior have been evolving since the COVID-19 pandemic began.
The firm noted also that the survey did not address the invasion of Ukraine in any form. “We believe, therefore, that the results do not capture the full effect of the invasion on U.S. consumer sentiment,” McKinsey said.
Among the findings:
Inflation hasn’t stopped consumers from spending—yet. In the early months of 2022, amid record inflation, U.S. consumers continued to open their wallets. U.S. inflation grew to nearly 8.5 percent in March 2022, with the May 2021 to March 2022 period showing the highest inflation in a decade. Yet, U.S. consumers spent 18 percent more in March 2022 than they did two years earlier, and 12 percent more than they were forecast to spend based on the pre-COVID-19 trajectory.
This loosening of purse strings was perhaps not surprising: U.S. consumers had approximately $2.8 trillion more in savings than they had in 2019, and many didn’t hesitate to dip into those savings as pandemic restrictions eased across the country. But it isn’t just the savers who have been making purchases: credit card debt is starting to rise as well.
People in every age cohort and income group spent more of their money, but year-over-year spending growth was highest among millennials (17 percent) and high-income consumers (16 percent).
For more of the Consumer Pulse findings, read the McKinsey report, “How U.S. consumers are feeling, shopping, and spending—and what it means for companies,” here