Deloitte: Omicron fails to shake consumer financial confidence

Omicron hasn’t done much to rattle consumer sentiment despite renewed safety concerns.

That’s according to Deloitte’s Global State of the Consumer Tracker, which found that while omicron has rattled consumers’ safety concerns, their financial sentiment holds steady. The monthly report tracks consumer priorities, purchase behaviors, preferences and spending decisions amid the pandemic’s ongoing impact.

The new data showed that discretionary spending remains steady, with consumers planning to spend an average of $4,800 per household during the next month, Thirty-five percent of budgets are slated for recreation, entertainment, restaurants, electronics, and leisure travel. These spending intentions have remained virtually unchanged over the past several months.

In addition, 59% of Americans remain optimistic that their financial situation will improve within the next three years, a figure that’s also remained steady since September 2021, noted Deloitte. And 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.

The study found that while global safety perceptions have fallen for activities such as in-person shopping, traveling and restaurant dining, the decline in safety perceptions across the U.S. has been more muted. The renewed safety concerns are likely impacting some purchase decisions, according to Deloitte. 

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%.  

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.

Travel-related findings are below.

• 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.

“The pandemic continues to create uncertainty that is affecting how and when consumers travel, attend work and school, and generally interact with others,” said Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte Services. “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.”

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.