- The fourth EY Future Consumer Index shows only slightly more than a quarter (27%) of UK consumers currently feel comfortable eating in a restaurant, and only 23% going to a bar or pub
- However, comfort levels around eating out have increased since the Eat Out to Help Out scheme was announced
- Short-term anxiety around shopping continues to ease as UK consumers comfortable going to a shopping mall and trying on clothes have more than doubled since May
- 56% of UK consumers felt comfortable shopping in a grocery store, up from 25% in May
- 72% of UK consumers are concerned about the impact of COVID-19 on their finances and 60% are concerned about the possible impact on their job
The majority of UK consumers are still uncomfortable with eating out, according to the latest EY Future Consumer Index, amid the hospitality sector’s calls for the Government to extend the Help Out to Eat Out scheme, which is due to end on Monday 31st August.
The survey of over 1,000* UK consumers found that only slightly more than a quarter (27%) of the British public is comfortable with eating in a restaurant even as restrictions ease, and 54% say it will take months or longer before they feel comfortable. A smaller percentage of respondents (23%) report feeling comfortable with going to a bar or pub as restrictions ease, and 45% say it will take months before they feel comfortable, while 9% say it will take years.
Comfort levels have increased since the June EY Future Consumer Index, which was conducted before the Eat Out to Help Out scheme was announced. In June, only 19% of UK consumers felt comfortable with eating in a restaurant, while 17% were comfortable with going to a bar or pub.
Christian Mole, EY UK & Ireland Head of Hospitality & Leisure, comments: “The Eat Out to Help Out scheme has been a welcome intervention which has undoubtedly boosted both revenues and morale across the hospitality sector, but has only been in place for a limited time to a limited effect. It’s clear it will still take months before the majority of consumers feel comfortable with eating out so it’s not surprising that businesses are calling for an extension to the scheme beyond 31 August.”
In the wider leisure sector, less than a fifth (18%) of UK consumers feel comfortable with going to a theatre or cinema and a similarly low proportion (17%) feel comfortable with exercising in a public gym. Thirty-eight per cent feel comfortable with going to a hairdressing salon or spa.
Christian Mole added: “While there has been an undoubted benefit from increased summer staycation activity in lieu of overseas trips, the hospitality and leisure sector has significant concerns over the level of likely autumn demand, which risks threatening business viability for some. Once the peak summer season and related high leisure traffic is over, many businesses will come under renewed financial pressure, particularly as the furlough scheme comes to an end and tough decisions on headcount need to be made. While social distancing measures continue to limit capacity, ongoing government support will be crucial for recovery.”
Consumers continue to adapt shopping habits
UK consumers have grown more comfortable with returning to the shops, with EY’s Index finding that comfort levels with traditional shopping behaviours such as going to a shopping mall and trying on clothes have both more than doubled since May, growing from 15% to 36% and 8% to 19% respectively. Similarly, in May, 25% of UK consumers said they felt comfortable shopping in a grocery store, and in the July EY Future Consumer Index, that figure rose to 56%.
UK consumer behaviour is changing as the pandemic progresses. Over the longer term, 56% intend to shop less frequently but spend more when they do shop, while 69% say they will be more mindful of hygiene and sanitation when shopping in person.
Silvia Rindone, EY UK&I Retail Partner, comments: “Retailers must be given credit for the active role that they have played. Consumers are much more hygiene conscious when they physically go shopping, and retailers have worked hard to respond by ensuring a variety of measures are in place to enable a safe shopping experience. This approach, taken together with bolstered online offerings, is clearly working, as the latest ONS figures show retail sales volumes have returned to pre-pandemic levels.”
Worries over personal finance are growing
Short-term fears may be easing but EY’s Index shows that consumers are becoming increasingly worried about the economic implications of the pandemic.
Sixty per cent of UK consumers are concerned about the impact of COVID-19 on their job. According to the Index, incomes have decreased for more than a third (35%) of UK consumers, while 9% have lost their income completely. Sixteen per cent of UK consumers say they are reliant on government help to replace or supplement their income. This includes consumers using the furlough scheme, which will stop at the end of October.
Seventy-two per cent are concerned about the impact of COVID-19 on their personal finances, and almost a quarter (24%) of UK consumers feel more pessimistic about what their financial position will be in a year’s time compared to today. EY’s Index suggests that concerns for the coming 12-months mean that UK consumers are currently taking greater responsibility for their future finances by saving more. Sixty-three per cent of respondents claim to be thinking more carefully about what they spend their money on and 54% are trying to save more money than they were pre-crisis.
Dan Cooper, UK Head of Banking at EY, comments: “As a nation we already know we don’t save enough, so if there are positives to come from this crisis, households able to grow their rainy-day fund and improve their financial resilience could be one of them. In times of economic uncertainty when fears around job security are high, people will be looking to their banks for financial support and guidance more than ever. It is absolutely key that products and services that help to save money are easily accessible and simple to use, as everyone looks to protect themselves financially through this difficult time.”
Increased interest in own-brand goods
As the pandemic has progressed, consumer purchasing priorities have changed, with an increased focus on value and price. Half of consumers (50%) say price is now a more important consideration than it was a month ago.
More than two-thirds of UK consumers (67%) say they now have an interest in own-brand packaged food, which is higher than the Index’s global† average (51%). In the UK, 62% of consumers would consider own-brand home and household care products, compared to 49% globally. Within beauty and personal care, this figure is 43% (UK consumers), compared to 41% globally. Brand preference is highest in alcoholic beverages where only 37% of UK consumers say they are willing to purchase own-brand products. However, this is significantly higher than the global average of 22%.
Mona Bitar, EY UK&I Consumer Leader, comments: “Price has become more of a purchase criterion for UK customers than it was in April, when concerns over availability became more important. The proportion of people who now say they would consider buying supermarkets’ own-brand products is much higher than the current market share for such goods. Own-brand packaged foods only have a 37% market share at the moment, according to Euromonitor.
“Retailers have a unique opportunity to test, experiment and grow their own-brand offerings. They should give more thought to the brands stocked, focus on the right product ranges, and then reallocate resources according to priority. To better target promotional activity, retailers also need to improve tracking and understanding of consumer’s attitudes towards pricing and value for money.”
Silvia Rindone concludes: “Certainly, the fact that consumer anxiety is easing is a positive step towards recovery. However, with unemployment expected to rise following the ending of the furlough scheme in October, retailers need to carefully consider what will give them the edge on price and consumer affordability to thrive moving forward.”
For the latest insights and information on the UK EY Future Consumer Index visit: https://www.ey.com/en_uk/consumer-products-retail/recovering-amid-increased-uk-consumer-economic-worries
Notes to editors:
About the EY Future Consumer Index
†The fourth EY Future Consumer Index is a survey of 13,519 consumers across UK, US, Canada, Brazil, France, Germany, Denmark, Sweden, Finland, Norway, India, UAE, Saudi Arabia, China, Indonesia, Japan, Australia and New Zealand during the week of 20 July 2020.
*1,007 respondents live in the UK. The index explores current behaviours, sentiment and intent.