Home Featured Perceptions Rattled by Omicron Variant, but Financial Sentiment Remains Steady

Perceptions Rattled by Omicron Variant, but Financial Sentiment Remains Steady

by S. Jack Heffernan Ph.D
  • Globally, safety perceptions have fallen sharply amid the rise in Omicron cases, affecting activities such as going to the store, traveling and restaurant dining. For some activities, Omicron has erased nearly one year of progress around improving global safety perceptions.
  • In comparison, the fall in safety perceptions across the U.S. has been more muted. The percent of U.S. consumers who feel safe sending their children to school declined the most, dropping from 40% in November to 33% in December.
  • Return to office progress has slowed as the percent of U.S. employed adults who cite being able to work from home increased slightly for the first time in four months, from 51% in November to 54% in December.
  • As safety concerns return, the percent of U.S. consumers who cite spending more on material things (versus experiences) increased from 19% to 25% since September. Similarly, those who cite replacing more in-person interaction with digital services increased from 21% to 26%.
  • Since October, the percent of U.S. consumers planning to fly domestically for leisure travel has fallen from an almost two year high of 43% to 33%. Those planning to fly internationally dropped from 30% to 19%.

Why this matters
Since March 2020, the world has been moving through a collective human experience that continues to shape and shift consumer priorities, purchase behaviors, preferences and spending decisions. To track these trends, Deloitte has been conducting a series of monthly surveys around the globe. The most recent iteration of “Deloitte’s Global State of the Consumer Tracker” was conducted in 23 countries during the week of Dec. 23-29, and queried at least 1,000 consumers in each country. The responses provide insight into how consumers are adapting to the next phase of the pandemic.

Omicron finally weakens safety perceptions in the U.S.
In two months, Omicron weakened safety perceptions for most activities globally to their lowest levels in a year, and for activities such as attending school and returning to work, to their lowest levels measured since mid-2020.

  • In the U.S., safety perceptions of many activities have dropped significantly, in particular sending children to school, which dropped from 40% in November to 33% in December. Safety perceptions also declined for taking a flight (48% to 42%) and engaging in one-on-one services (71% to 65%) since early November.
  • Renewed safety concerns are likely impacting some purchase decisions. Since September, the percent of U.S. consumers who cite spending more on material things (versus experiences) increased from 19% to 25%. Similarly, those who cite replacing more in-person interaction with digital services increased from 21% to 26%.
  • There is also some evidence that Omicron is slowing return-to-office progress. Throughout the fall season, the percent of U.S. employed adults who cited being able to do their job from home dropped steadily from 63% to 51%. But that number increased slightly to 54% in December.
  • Overall, Americans continue to spend more time working remotely compared to the rest of the world. The average number of days per week spent working remotely in the U.S. has remained consistent at just over three days since September.

Key quote
“While safety perceptions have again declined amid a rise in Omicron cases, consumer confidence remains unshaken. Overall discretionary spending intentions among U.S. consumers remain steady. People have seen this movie before. And I think this speaks to a growing resilience to the pandemic’s ongoing ebb and flow.”

–     Anthony Waelter, vice chair, Deloitte LLP and U.S. consumer industry leader

Omicron has yet to rattle financial sentiment
Unlike past pandemic waves, Omicron has yet to rattle consumer confidence in the U.S. Overall financial sentiment and discretionary spending intentions for the month ahead remain steady.

  • U.S. consumers expect to spend an average of $4,800 per household over the upcoming month, with one-third (35%) of their budgets slated for more discretionary categories such as recreation and entertainment, restaurants, electronics and leisure travel. These spending intentions have remained virtually unchanged over the past several months.
  • Roughly 6 in 10 (59%) Americans remain optimistic that their financial situation will improve within the next three years, a figure that’s also remained steady since September 2021.
  • The percent of consumers concerned about their level of savings (50%) and credit card debt (40%), while roughly unchanged since September, still remains relatively high.
  • Vehicle demand shows some signs of weakening. In December, 16% of respondents were planning to purchase a new vehicle within the next six months, down from 29% in September. Conversely, purchase intent for used vehicles increased slightly, from 9% to 13%.
  • Inflation concerns may be starting to ease. For the first time since September, the percent of U.S. consumers who cite rising prices for everyday purchases such as groceries and clothing did not climb.

More Americans hit the brakes on leisure travel
While consumer confidence generally appears unscathed, renewed pandemic uncertainty is likely having a stronger influence on travel decisions. While more Americans may be thinking twice about staying in a hotel or flying, some travel segments, such as car rental and private accommodation rentals, might be proving to be more pandemic proof.

  • Spending intentions for leisure travel for the month ahead have been gradually weakening, falling from an average of roughly $330 per survey respondent in September to $240 in December.
  • Booking intentions for the three months ahead slipped across most travel products in December, including hotel (47%), domestic air (34%), cruise (21%) and international air (19%).
  • Amid the rise of Omicron, booking intentions for both rental cars (34%) and private accommodation rentals (34%) have remained steady, suggesting consumers continue to perceive these forms of travel as safer.
  • Among employed adults who typically travel for business, 67% expect to take a business trip within the next three months, down significantly from 80%.

Key quote
“Consumers have been resilient, adapting behaviors to the pandemic as the number of cases continues to fluctuate. The pandemic continues to create uncertainty that is affecting how and when consumers travel, attend work and school, and generally interact with others. Yet, time and again, consumers have demonstrated the ability to be agile and flexible as we move into the next phase of this collective global experience.”

–     Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte Services LP

For more information, including the full survey findings, visit the “Global State of the Consumer Tracker.” Connect with us on Twitter at @DeloitteCB or on LinkedIn @AnthonyWaelter and @StephenRogers.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 345,000 people worldwide connect for impact at www.deloitte.com.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

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