One year of lockdowns – how COVID-19 has shaped consumer behaviour and personal finances

One year of lockdowns – how COVID-19 has shaped consumer behaviour and personal finances

March 23, 2021
5 min read

Today marks the one year anniversary when Boris Johnson told Brits to stay at home to help stop the spread of COVID-19. Two further lock downs later, our analysts examine the ways that consumer behaviour has shifted as a result – from investing in multi-purpose homes, to splashing out on premium loungewear and shifting from cash to contactless payments.

Jack Duckett, Mintel Associate Director of Consumer Lifestyles Research

The COVID-19 outbreak represents the first serious existential threat in many years, and for many people this had a profound impact on their sense of priorities. While already a booming consumer lifestyles trend, health and wellbeing has been a major area of increased interest as consumers have realised the importance of maintaining good health in fending off the virus and any others that may come in future. This has supported growth in a number of areas – including functional foods, home gym equipment and vitamins, minerals and supplements. Growth in the vitamins, minerals and supplements category is expected to remain strong in the coming years as consumers continue to prioritise protecting their immune system, as well as increased exercise levels for many.

Fashion has become more casual in recent years, with a far greater focus on comfort. Unsurprisingly, this trend has been accelerated by the COVID-19 outbreak and associated lock downs, as consumers have revelled in the lack of need to smarten themselves up for the school run, workplace or other social events. This shift towards comfort has, however, never been about inferior quality and consumers have been drawn to premium athleisure, loungewear and underwear brands as they seek to maximise the working from home experience. After months in lock down, many will once again invest in new clothes that will add to the sense of occasion that will come with being reunited with their loved ones, but the shift away from office working is unlikely to see proper recovery in sales of very smart formalwear.

During the lock downs homes have become more multi-functional

The shift in-home has not only made people reassess their sartorial options, but also their surroundings. Many people have been investing in new furniture and furnishings, as they have sought to make the space suitable for multiple needs – as an office, classroom, family space and exercise studio. While many hope to return to a more balanced life between time spent in and out of their homes, there can be little doubt that this multi-purpose home space will play a greater role in people’s lives as working from home becomes a more persistent trend. This will see scope for continued spend on homewares and accessories that will enhance the home and allow it to more easily transition between the various roles it must now play.

Thomas Slide, Mintel Senior Financial Services Analyst on how personal finances have changed

Despite the economic damage caused by COVID-19, household finances have been largely protected over the past year.

For those who have seen their income maintained, reduced outgoings have led to a surge in saving activity with deposits largely building up in current and instant access savings accounts. Much of this is ready to be spent as the economy reopens, but saving is a deeply emotional activity and once people have seen money start to build up in their accounts, at least some will be encouraged to continue the habit.

Contactless payments have become more popular, while cash usage has fallen

Even before the pandemic, card payments were increasing while cash usage was in decline, but this trend accelerated rapidly in 2020 as hygiene concerns were raised about cash and the contactless limit was increased from £30 to £45. With this limit set to rise to £100, contactless payments have become a way of life. While some people will want to return to cash once the pandemic is over, most will be won over by the ease and simplicity of making contactless payments and cash will make up an ever-smaller share of the payments landscape.

As we have been forced to get used to working, socialising and shopping digitally, we are also becoming increasingly comfortable using digital banking. Additionally, with cash falling out of use, people have fewer reasons to visit branches. Despite many bank branches remaining open for essential purposes during the pandemic, half of people used them less than before, while less than half who used branches before the pandemic expect to return to using them as much as before. As branches continue to be used less, so more will inevitably close. Banks and building societies seeking to maintain a physical link to local communities have an opportunity to rethink what this looks like and bank branches are likely to look very different in the future as a result.


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