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Consumers’ spend is impacted by both the decrease in disposable income and the psychological impact of COVID-19. We see new segments arise, separated by their need to group products and services into categories of necessity, with spend moderated by financial attitudes. Overall four in ten are financially worse off, with another 13 percent deferring major purchases.

Value for money (63 percent), and its corollary price, is the single most important factor in decision-making, with nearly half of respondents saying that it is more important now than pre-COVID-19 (47 percent), and is true for all markets included in this study. This is a direct result of the financial concerns that now affect two-fifths of consumers.

Value for money, chart

Consumers in Germany, France and Hong Kong (SAR), China feel more calm and secure, fitting into the financially comfortable category. In Brazil, Japan, Italy and Spain, more consumers have stopped all non-essential purchases and are more selective, feeling more financially overwhelmed and financial recovery being the priority. Value for money, and its corollary price, is the single most important factor in decision-making, with nearly half of respondents saying that it is more important now than pre-COVID-19, true for all markets included in this study. This is a direct result of the financial concerns that now affect two-fifths of consumers.
 

What does this means in the new reality?

Organizations will need to rethink their business and operating models. The consumer’s search for value for money is much more than just short-term margin dilution. It is a fundamental change in purchase priorities and will be prevalent for 12 months or more.

  

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Gary Reader

Global Head of Clients & Markets 
KPMG International

René Vader

Global Sector Head, Consumer & Retail, KPMG International; Partner, Advisory Leadership
KPMG in France

Judd Caplain

Head of Global Banking & Capital Markets, KPMG International
KPMG in the U.S.

Laura J Hay

Global Head of Insurance
KPMG International