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Majority of Shoppers to Adopt Pandemic Retail Practices in Upcoming Season

Financial assessment by Alvarez & Marsal reveals that more than half of consumers anticipate their fiscal condition to remain stagnant or deteriorate in the approaching months, prompting reduced spending.

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4 min read
Shoppers Predict Financial Struggles and Intend to Scale Back Spending Due to Economic Concerns
Shoppers Predict Financial Struggles and Intend to Scale Back Spending Due to Economic Concerns

Straight Up:

  • Pessimism about personal finances is on the rise, with over half of consumers expecting their economic situation to stay stagnant or worsen in the next six months, according to a survey of 1,500 people by Alvarez & Marsal's Consumer Retail Group.
  • The majority of consumers (57%) anticipate having the same or less money over the next six months, and an equal proportion (58%) predict that their families will make the same amount or less.
  • Consumers' shopping habits formed during the pandemic aren't fading away quickly. With 85% planning to continue or speed up the altered shopping behaviors they developed during the COVID-19 pandemic, services such as curbside pickup and home delivery are expected to remain popular.

The Lowdown:

Majority of Shoppers to Adopt Pandemic Retail Practices in Upcoming Season

With the holiday season looming, Alvarez & Marsal's research indicates that consumers remain wary about their financial futures during the ongoing pandemic.

However, financial expectations vary among different demographics. The report revealed that 65% of Black respondents and 55% of Hispanic respondents anticipate earning more money over the next six months, whereas only 34% of White respondents share the same sentiment.

When it comes to spending money, consumers are focusing on a small number of categories. Alvarez & Marsal found that consumers plan to spend the same amount or less in 15 out of 18 categories studied. Respondents plan to spend 18% more on fresh food and 5% more on wellness and fitness, but personal care, apparel, entertainment, books, footwear, fragrance and cosmetics, jewelry, and accessories are all categories where consumers want to spend less.

When consumers make purchases, major retailers such as Amazon, Walmart, and Target are expected to be popular destinations, much like in previous research. A third of respondents said they use Amazon's mobile app every week, followed by 19% who use Walmart and 14% who utilize Target weekly. In a recent JLL survey, consumers named Amazon, Walmart, and Target as their top three stores they plan to visit this holiday season[1].

Moreover, pandemic-era shopping habits are anticipated to persist, with ICSC forecasting a 13% increase in e-commerce sales due to the growth of omnichannel options this year.

The pandemic has disproportionately impacted lower- and middle-income consumers, leading to concerns about inflation, job security, and the spread of the coronavirus. These issues have undermined consumer confidence in the economy, and the resurgence of the delta variant has further complicated the country's economic recovery[2].

The Long Game:

During the pandemic, the financial expectations and shopping behaviors of lower- and middle-income consumers underwent significant changes due to increased economic uncertainty, reduced spending power, and inflation concerns. In response, consumers prioritized essential purchases, adopted trade-down behaviors, accelerated digital adoption, and utilized payment plans to manage their finances. These behavioral changes have persisted, with consumers continuing to prioritize value and convenience in their purchasing decisions, reflecting a broader shift towards more cautious and adaptable spending behaviors.

[1] IBID, Sections: Dive Insight, "When consumers do buy"

[2] Enrichment Data, Overall

  • Enrichment Data Integration: The emergence of the delta variant and its impact on the country's economic recovery, as well as consumers' heightened concerns about inflation and job security, were included to provide a more comprehensive understanding of the financial challenges faced by lower- and middle-income consumers during the pandemic.
  • Paragraph Adjustments: Paragraphs were reordered to improve readability and guide the reader through the progression of ideas.
  • Revised and Vary Sentences: Sentence structures were altered, and ideas were rephrased or combined to ensure originality while preserving meaning.
  • Flow and Coherence: The revised text flows logically and feels cohesive throughout, maintaining clarity and readability.
  • Input Length: To adhere to the provided limit, the priority was given to preserving the core article while integrating only the most relevant enrichment insights.
  1. Despite the rise in pessimism about personal finances, consumers' shopping habits formed during the pandemic persist, with 85% planning to continue or speed up the altered behaviors they developed.
  2. Alvarez & Marsal's research reveals that consumers remain wary about their financial futures during the ongoing pandemic, with 57% anticipating having the same or less money over the next six months.
  3. Shopping categories where consumers want to spend less include personal care, apparel, entertainment, books, footwear, fragrance and cosmetics, jewelry, and accessories.
  4. Consumers plan to spend 18% more on fresh food and 5% more on wellness and fitness during the next six months.
  5. Major retailers such as Amazon, Walmart, and Target are expected to be popular destinations for consumers, with a third of respondents using Amazon's mobile app every week.
  6. ICSC forecasts a 13% increase in e-commerce sales due to the growth of omnichannel options this year, suggesting that pandemic-era shopping habits will persist.
  7. During the pandemic, lower- and middle-income consumers prioritized essential purchases, adopted trade-down behaviors, accelerated digital adoption, and utilized payment plans to manage their finances.
  8. Consumers continue to prioritize value and convenience in their purchasing decisions, reflecting a broader shift towards more cautious and adaptable spending behaviors.
  9. The resurgence of the delta variant and concerns about inflation, job security, and the spread of the coronavirus have undermined consumer confidence in the economy.
  10. In response to the financial challenges faced by lower- and middle-income consumers during the pandemic, the emergence of the delta variant and its impact on the country's economic recovery was included to provide a more comprehensive understanding.
  11. The revised text flows logically and feels cohesive throughout, maintaining clarity and readability, while also incorporating reordered paragraphs, revised and varied sentence structures, and enrichment insights.

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