Growing split between how Covid-19 has affected different generations

The journey through Covid-19 has left a lasting imprint on consumers that is now playing out in spending habits.

People wearing masks in Melbourne Central shopping centre in February. Picture: NCA NewsWire/David Geraghty

The journey through COVID-19, lockdowns, social distancing and closed borders has left a lasting imprint on consumers, ranging from health to savings and career goals, that is now playing out in spending habits.

It is between the generations, from Gen Z to pre-Boomers, where the differences are starkest. There has been a split between the young, middle-aged and the old as the pandemic meant something different to every generation.

A new survey, the inaugural Commonwealth Bank Insights Report, has shed a light on consumer behaviour post-pandemic and discovered shoppers eager to buy locally sourced products, frequent neighbourhood shopping centres and many cutting overall spending to preserve cash.

And when they are spending it is increasingly online, using mobile wallets such as Apple Pay rather than cash.

The CommBank survey of almost 5700 consumers found the pandemic had affected the way people live, work and spend, and that while some were able to boost savings, COVID reduced the household income of more than a third of Australians surveyed. One in four report having less money to spend on necessities.

This reflected the uneven ramifications of the pandemic, with what generation a shopper was born into often dictating their experience. The uneven impact of the pandemic is highlighted by the experiences across the generations, CBA says.

“Baby Boomers and pre-Boomers report the least impact. Meanwhile, Gen X, more likely juggling children, careers and mortgages, felt the biggest impact on all aspects of their lifestyle. Gen Z is the age group whose employment was most affected, closely followed by Gen Y and Gen X,” the report said.

 

These latter two cohorts also report the biggest impact on their mental and physical health. More than others, Gen Z reported some positive outcomes, notably for their physical health, savings and money available for necessities.

Across the population, 42 per cent of consumers say they have spent less during the pandemic than they had previously, especially on discretionary items such as flights, accommodation and restaurants. Another 39 per cent of consumers didn’t change their overall spending while just 19 per cent of respondents said they actually spent more.

Those spending up through the pandemic were typically younger.

“These consumers were strongly skewed towards Gens Z and Y. The two older generations were the least likely to open their wallets more and the most likely to maintain their usual spending levels,” the report said.

“Consumers took a similarly cautious approach to the money they normally would have spent on activities that the pandemic curtailed. Some 40 per cent of consumers directed their unspent money towards savings and investments, with Gens Z and Y figuring prominently.”

Whether consumers will switch back to their pre-pandemic behaviour or stick with their new-found preferences once vaccines are rolled out is the next question.

“Consumers are telling us is that things they started to do during COVID and will most likely continue are those such as keeping fit, eating and cooking at home,” says CBA executive manager, consumer and diversified industries, Jerry Macey.