Savings glut waiting for retailers to tap into
While some consumers and households have been hit hard by the effects of the Coronavirus lockdown and disruption, most surveys indicate the majority have seen either a small impact or none on their income. The government’s measures to cushion people with measures like furloughing and support for the self-employed seem so far to have helped effectively, as was hoped.
At the same time, as expected, spending across huge swathes of the consumer economy, has virtually come to a halt. Anything that might be termed an ‘experience’ — from travel and hotels to restaurants, bars, gyms and cinemas — has been ruled off limits for the foreseeable future. At the same time, while online sales have boomed, physical ‘non-essential’ retail has been shut down, forcing people to save, even if they don’t feel like it.
The results can be seen from April’s figures, which show non-food physical retail losing more than half of its turnover, being only sustained by the few stores including DIY and health and beauty operators as well as the non-food operations of grocers. Online, as expected, has boomed, while transport and travel and hospitality spending has all but disappeared.
The end result is a savings boom that is likely to surpass that of March by a wide mark. ConsumerCast currently estimates that this could already amount to £44bn saved, up by £32bn from last April. This amounts to an extra £1,200 per household in savings, in just one month, albeit with big variations depending on which age group. To find out more about the UK’s savings ‘binge’ – who’s expected to be saving, how much and how retailers can tap into it – buy the new ConsumerCast report
In just over two weeks’ time, the ban on ‘non-essential’ shops opening will be lifted for those able to ensure a safe environment, with strict social distancing and hygiene rules. This will be the starting gun for a race against time for retailers to get shoppers spending again before the full worries of job losses and business closures hit home. The marketing clock is ticking loudly.