Fearful and Frugal: Coronavirus Wreaks Havoc on America’s Psyche
(Bloomberg) -- As the U.S. reopens, Americans aren't much interested in going out and spending.
A survey of 2,200 U.S. adults shows how Covid-19 has dramatically changed behavior in the world’s biggest economy, potentially for the long haul. The data flashes warning signs for the recovery, showing waning interest in public events and material things, like appliances and clothes, and a new austerity, expressed through pantry stockpiling and delayed big-ticket purchases.
This foreshadows an era of fear and frugality that could push a full economic rebound—one that Washington and Wall Street are banking on—out of reach. The data also raises doubts about how much rising consumer confidence will translate into spending, on which the economy heavily relies. And this survey, polled last weekend, doesn’t account for the past week when a spike in cases stalled reopenings in several states, potentially deepening the pandemic’s behavioral impact.
“People are generally expressing that they'll do certain things less, or at home, on their own,” said Victoria Sakal, managing director of brand intelligence at Morning Consult, Bloomberg News’s partner on the survey taken the last weekend of June. “There’s also a health component to how safe, comfortable and protected people feel.”
Americans—often stereotyped around the world as confident to the point of arrogance—have developed a fear of enclosed retail spaces. While about three-quarters of U.S. adults feel okay shopping inside grocery stores or small businesses, more than half don’t feel safe inside a shopping center, the data show. This is only adding to the woes of malls.
And that new preference for smaller retailers appears to have staying power: Even once the pandemic ends, nearly 30% of Americans say they plan to buy more from small businesses than they did before the virus.
“Small businesses have built people’s trust,” unlike shopping malls, Sakal said.
It’s not just malls that have Americans more circumspect. When asked about their social plans after the economy fully reopens, more than half said they weren’t looking forward to going to a movie theater, sporting event, concert or show.
Bars, in particular, have lost their appeal, with half of U.S. adults not even a little bit looking forward to grabbing a beer when the lockdowns end. That apprehension comes amid a recent surge in cases tied to drinkers spreading the virus. Around 100 people were recently infected from just four bars in Minnesota, and another 100 cases are linked to one watering hole in Baton Rouge, Louisiana.
Americans appear less fearful of restaurants, but even then, roughly two-thirds say they’d feel better about eating indoors at an eatery that required employee masks, new kitchen cleaning protocols and spaced-out tables.
These cautious attitudes mark a stark change for a country that is both admired and derided for its at-times extravagant consumer culture. America invented the shopping mall and the movie theater, and has eight of the world’s ten biggest sports stadiums. But the coronavirus lockdowns have given rise to a new attitude: If you reopen it, they might not come.
Some of the hesitance is economic. Americans became more frugal during the pandemic, the survey shows. Over the past three months, 23% of respondents purchased more generic items, 28% increased bulk purchases and 41% chose to save money more often by forgoing a purchase. People also increased price comparing, while putting luxury and expensive purchases on hold at a higher rate.
This thriftiness could be here to stay, permanently shifting the makeup of the average American consumer—not unlike the Great Depression’s impact on spending habits 90 years ago. More than three quarters of consumers say they expect to increase their savings rate and financial conservatism after economies fully reopen.
The survey comes just days after the U.S. government's top infectious-disease expert, Dr. Anthony Fauci, announced a “disturbing surge” of new cases, sparked by hotspots in Texas, Arizona, Florida and California. At the same time, New York and neighboring New Jersey, the original epicenters of the disease, had second thoughts about the speed of their reopenings and delayed the return of indoor dining. Meanwhile, cases in young Americans have spiked.
Nonetheless, when the lockdowns fully come to an end, it’s those youngest Americans who will be first out the door. The survey shows 29% Gen Z consumers are looking forward to returning to restaurants, with about one in four getting excited about concerts and movies—more than any other cohort.
If they can afford to go out, that is. The study shows that when it comes to saving, Gen Z adults, ages 18 to 24, are the most intent on “definitely” being more frugal after the pandemic.
That makes sense, according to Sakal. “Younger generations are more likely to have changed their purchasing due to Covid,” she said. “They've been more directly impacted by job changes, and don't have as much savings.”
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