McKinsey Survey: Saudi consumer sentiment during the coronavirus crisis

McKinsey & Company 1
Saudi consumer optimism has remained steady throughout
the COVID-19 crisis
Confidence in own country’s economic recovery after COVID-191
% of respondents
1 Q: How is your overall confidence level in economic conditions after the COVID-19 situation? Rated from 1 “very optimistic” to 6 “very pessimistic”; figures may not sum to 100% because of rounding.
Source: McKinsey & Company COVID-19 KSA Consumer Pulse Survey 6/16–6/18/2020, n = 514; 4/24–4/29/2020, n = 508; 4/3–4/6/2020, n = 510; 3/23–3/26/2020, n = 510, sampled and weighted to match
KSA's general population 18+ years
12%
6%
30%
32%
32% 35%
58%
64% 61% 61%
3% 4%
Mixed: The economy will be
impacted for 6–12 months or
longer and will stagnate or show
slow growth thereafter
Pessimistic: COVID-19 will
have lasting impact on the
economy and show
regression/fall into lengthy
recession
Optimistic: The economy will
rebound within 2–3 months and
grow just as strong as or stronger
than before COVID-19
KSA
Mar 23–26 Apr 3–6 Apr 24–29 Jun 16–18

Reduce slightly / reduce a lot About the same Increase slightly / increase a lot
Past 2 weeks
10%
32%
50%
6%
Next 2 weeks
31%
63%
Past 2 weeks
58%
12%
38%
1 Q: How has the COVID-19 situation affected your (family’s) overall available income, spending, and savings in the past two weeks? Figures may not sum to 100% because of rounding.
2 Q: How do you think your overall available income, spending, and savings may change in the next two weeks? Figures may not sum to 100% because of rounding.
More than half of consumers have seen a decline in income and
savings in the last two weeks
45%
18%
38%
Past 2 weeks
20%
44%
36%
Past 2 weeks
34%
39%
27%
Next 2 weeks
April 24–29 June 16–18
Household income1,2
% of respondents
Household spending1,2
% of respondents
Household savings1,2
% of respondents
12%
Past 2 weeks
10%
40%
22%
68%
25%
Past 2 weeks
63%
15%
45%
Next 2 weeks
Source: McKinsey & Company COVID-19 KSA Consumer Pulse Survey 6/16–6/18/2020, n = 514; 4/24–4/29/2020, n = 508, sampled and weighted to match KSA's general population 18+ years
April 24–29 June 16–18 April 24–29 June 16–18

KSA consumers increasingly believe that adjustment to their
routines due to COVID-19 will last well beyond another two months
42%
0–1 month 14%
31%
10%
4%More than one year
7–12 months
2–3 months
4–6 months
10%
7%
28%
29%
17%
9%
No impact
More than one year
2–3 months
0–1 month
4–6 months
7–12 months
Adjustments to routines1
% of respondents
Impact on personal/household finances2
% of respondents
~87%
believe it will take
another 2+ months
before routines can
return to normal, up
from 84% in the last
pulse survey
~83%
believe their finances will
be impacted for 2+
months by the COVID-19
situation, down from 91%
in the last pulse survey
1 Q: How long do you believe you need to adjust your routines, given the current COVID-19 situation, before things return back to normal in KSA (e.g., government lifts restrictions on events/travel)? Figures may not sum
to 100% because of rounding.
2 Q: How long do you believe your personal/household finances will be impacted by the COVID-19 situation? Figures may not sum to 100% because of rounding.
Source: McKinsey & Company COVID-19 KSA Consumer Pulse Survey 6/16–6/18/2020, n = 514, sampled and weighted to match KSA's general population 18+ years

Which best describes how often you are doing each of the following items1
% of respondents
1 Q: Which best describes how often you are doing each of the following items? Possible answers: “doing less since coronavirus started”; “doing about the same since coronavirus started”; “doing more since coronavirus started.”
KSA consumers are becoming more mindful of how they spend
their money and adopting habits like making lists and researching
9%
8%
10%
11%
19%
39%
42%
43%
50%
46%
52%
50%
48%
39%
35%
Becoming more mindful of where I spend my money
Looking for ways to save money when shopping
Changing to less expensive products to save money
100%
Researching brand and product choices before buying
Spending time planning/making shopping lists
Doing less Doing about the same Doing more

Consumers show increased shopping intent for essential categories,
possibly in anticipation of an expected tax increase in July
13
26
31
34
45
57
48
46
64
56
15
15
20
30
54
35
28
17
24
23
14
9
15
8
9
19
38
22
17
9
Tobacco products
Groceries
Snacks
Alcohol
Household supplies
Food takeout & delivery
Quick-service restaurant
Restaurant
Footwear
Apparel
Accessories
Jewelry
Non-food child products
Personal-care products
Furnishings & appliances
Skin care & makeup
Expected spending per category over the next two weeks compared to usual1
% of respondents
Decrease Stay the same Increase
24
41
49
68
38
49
58
26
45
46
46
60
56
63
71
66
31
13
9
12
10
16
12
17
13
9
15
15
13
16
9
13
Personal-care services
Fitness & wellness
Entertainment at home
Consumer electronics
Books/magazines/newspapers
Pet-care services
Out-of-home entertainment
Gasoline
Vehicle purchases
Short-term home rentals
Travel by car
Cruises
Adventures & tours
International flights
Hotel/resort stays
Domestic flights
1 Q: Over the next two weeks, do you expect that you will spend more, about the same, or less money on these categories than usual? Figures may not sum to 100% because of rounding.
2 Net intent is calculated by subtracting the % of respondents stating they expect to decrease spending from the % of respondents stating they expect to increase spending.
3 Data not available
Net intent2
+7
-28
-40
-56
-28
-33
-46
-9
-32
-37
-31
-45
-43
-47
-62
-53
Net intent2
+22
+4
+23
-45
+2
-14
-10
+0
-22
-43
-39
-31
-56
-47
+2
-13
N/A3

Consumers expect to shop more online across all categories,
except jewelry
1 Q: Over the next two weeks, where do you expect you’ll buy these categories? Tell us if you will shop in the following places more, about the same, or less in the next two weeks; please note, if you don’t buy
in one of these places today and won’t in next two weeks, please select “N/A.”
2 Net intent is calculated by subtracting the % of respondents stating they expect to decrease shopping frequency from the % of respondents stating they expect to increase shopping frequency.
Expected change in shopping channel per category over the next two weeks1
Axes show net intent,2 bubble size relative to share of respondents that have purchased category in last six months
18 30-3
-33
0 3
-45
-6
6 9 12 15
3
-30
21 24
-24
3627
-39
33
-21
-42
39 42
-48
-36
-27
-18
-15
-12
-9
-3
0
6
Jewelry
Entertainment
at home (e.g., Netflix)
Snacks
Fitness &
wellness
Accessories
Tobacco
Groceries
Household supplies
(e.g., cleaning, laundry)
Personal-care products
(e.g., soap, shampoo)
Furnishing &
appliances
Skincare & makeup
(e.g., diapers)
ApparelFootwear
Consumer
electronics
Books,
magazines,
newspapers
Household essentials
Discretionary
In-store
Online

More people expect to make a portion of their purchases online
post-COVID-19 than before
Consumers’ use of online channel before and after COVID-191,2
% of respondents purchasing online3
1 Q: Before the coronavirus (COVID-19) situation started, what proportion of your purchases in this category were online vs from a physical store/in person?
2 Q: Once the coronavirus (COVID-19) situation has subsided, tell us what proportion of your purchases in this category you think will be online vs from a physical store/in person?
3 Respondents who indicated that they have not bought the category online and do not intend to do so in the next two weeks are classified as not purchasing online.
37
59
39
32
45
42
61
47
64
56
62
37
62
79
57
34
Household supplies
+10
+22
+13
Jewelry
Snacks
+8
Groceries
Consumer electronics
+14
+20Furnishing & appliances
+12Personal-care products
+6Skin care & makeup
Fitness & wellness
Books, magazines, newspapers
+13
Apparel
+16Footwear
+16
Accessories
Tobacco +12
+14
+19
+5
+16
Pre-COVID-19 Growth in consumers buying online
% growth in customers
purchasing category online
22%
22%
56%
10%
44%
44%
29%
38%
26%
33%
28%
16%
29%
6%
31%
28%
35%

Have you used any of the following since COVID-19 started1
% of respondents
Many consumers have discovered new shopping behaviors,
including new stores and brands
1 Q: Since the coronavirus (COVID-19) situation started (i.e., in the past ~3 months), which of the following have you done? 25% consumers selected “none of these.”
2 “New shopping method” includes curbside pickup and delivery apps.
55%
41%
37%
35%
31%
Different brand
New digital shopping method
Private label/store brand
Different retailer/store/website
New shopping method2
75%
Consumers have tried
a new shopping
behavior

Value and convenience are key drivers for consumers trying new
places to shop
Reason for shopping at a new retailer/store/website in the past three months1
% of respondents selecting reason as top three
39%
30%
25%
28%
25%
23%
18%
26%
27%
7%
13%
8%
7%Company treats employees well
Better prices/promotions
Better shipping/delivery costs
Offers good delivery/pickup options
Can get all the items I need from one place
Better value
More easily accessible from my home
Less crowded/shorter lines
Products are in stock
Better quality
Offers natural/organic options
Cleaner/has better hygiene measures
Supporting local businesses
1 Q: You mentioned you shopped from a new retailer/store/website since the coronavirus (COVID-19) situation started. What was the main reason you decided to try this new retailer/store/website? Select up to 3.
Value
Health/Hygiene
Quality/Organic
Purpose-driven
Convenience
Availability

Many consumers have tried a new brand based on price and
availability
Reason for trying a new brand in the past three months1
% of respondents selecting reason as top three
45%
32%
26%
10%
34%
31%
13%
25%
21%
14%
8%
Better value
Cleaner/has better hygiene measures
Better prices/promotions
Better shipping/delivery costs
Larger package sizes
Products are in stock
Is natural/organic
Better quality
Is available where I’m shopping
Supporting local businesses
The company treats its employees well
1 Q: You mentioned you tried a new/different brand than what you normally buy. What was the main reason that drove this decision? Select up to 3. “Brand” includes different brand, new private label/ store brand.
Value
Availability
Purpose-driven
Quality/Organic
Convenience
Health/Hygiene

Source of uncovering new retailer/store/website1
% of respondents
Online activity including display ads and word of mouth are
powerful tools for consumers discovering new places to shop
1 Q: You mentioned you shopped from a different retailer/store/website since the coronavirus (COVID-19) situation started. How did you initially come across this new retailer/store/website? Select one.
26
13
27
277
Heard from a friend/family member
Proactively researched
Advertisement on TV/Print/Radio
Someone talking about it on social media
Advertisement online

Have you used or done any of the following since
COVID-19 started,1 % of respondents
1 Q: Have you used or done any of the following since the COVID-19 situation started? If yes, Q: Which best describes when you have done or used each of these items? Possible answers: “just started using since COVID-19 started”;
“using more since COVID-19 started”; “using about the same since COVID-19 started”; “using less since COVID-19 started.”
Saudi consumers have picked up new digital and low-touch
activities, including new remote learning and app usage
31%
32%
17%
19%
23%
10%
12%
22%
15%
23%
6%
9%
13%
8%
6%
5%
4%
4%
4%
Digital exercise machine
4%
Telemedicine: physical
3%
5%
Video chat: personal
Playing online games
2%
Online streaming
5%
Videoconferencing: professional
Remote learning: my children
Remote learning: myself
0%Spending time outdoors
TikTok
Online fitness
Wellness app
5%
1%Telemedicine: mental
3%Watching e-sports
25%
29%
10%
18%
17%
31%
30%
12%
42%
23%
6%
12%
5%
5%
9%
15%
9%
8%
Used a new store/restaurant app
Used deal-finding plug-ins
3%
2%
3%Meal-kit delivery
Restaurant delivery
7%
2%
Purchased pre-owned products
Purchased directly from social media
Grocery delivery
Personal care/grooming at home
2%
Store curbside pickup
Restaurant curbside pickup
In-store self-checkout
3%
Buy online for in-store pickup
4%
6%
Quick-serve restaurant drive-thru
5%
Cooked regularly for myself/my family
Not using Just started usingUsing less / the same Using more

Consumer changes to digital and low-touch activities fall
into three primary buckets
1 Q: Compared to now, will you do or use the following more, less or not at all, once the coronavirus (COVID-19) situation has subsided? Possible answers: “will stop this”; “will reduce this”; “will keep doing what I am doing now”, “will increase this.”
2 User growth is calculated as % of respondents who replied that they are new users over % of respondents who replied that they were either: increased usage users, same usage users, or reduced usage users.
UsergrowthsinceCOVID-192
High(>23%)Low(<23%)
Intent to use after COVID-191
Percent of new or increased users who intend to keep doing activity after COVID-19
Low (<69%) Medium-high (>69%)
Works for now
Activities necessitated by
COVID-19 that are poor
substitutes for in-person
counterparts and
consequently have lower
intent to continue
Accelerated shifts
Satisfactory digital replacements for
in-person activities and connectivity,
with growing adoption
Potentially here to stay
New and familiar forms of
entertainment and interaction with
medium-high intent to continue
 User growth is defined as the percent of
respondents who replied that they are new
users over the percent of respondents who
replied that they were using this service
pre-COVID-19
 Intent to continue is defined as the percent of
respondents who replied that, after COVID-19,
they will keep their usage at the same level or
will increase usage

UsergrowthsinceCOVID-192
Intent to use after COVID-191
Percent of new or increased users who intend to keep doing activity after COVID-19
Post-COVID-19 usage intent is higher for new fitness and
telemedicine; lower for workarounds mandated by COVID-19
1 Q: Compared to now, will you do or use the following more, less, or not at all, once the coronavirus (COVID-19) situation has subsided? Possible answers: “will stop this”; ”will reduce this”; “will keep doing what I am doing now”; “will increase this.”
2 User growth is calculated as % of respondents who replied that they are new users over % of respondents who replied that they were using the product/service pre-COVID-19 (using more, using the same or using less).
High(>23%)Low(<23%)
Low (<69%) Medium-high (>69%)
Works for now Accelerated shifts
Potentially here to stay
User
growth
Intent to
continue
Meal-kit delivery
Videoconferencing: professional
Restaurant curbside pickup
Online fitness 38% 70%Changed primary grocery store
Store curbside pickup
21% 65%
User
growth
Intent to
continue
43% 54%
42% 58%
85% 62%
Grocery delivery 33% 70%Telemedicine: physical 83% 63%
Wellness app 27% 82%Remote learning: my children 48% 67%
24% 44%
Spending time outdoors
Watching e-sports
Online streaming
Telemedicine: mental
Quick-serve restaurant drive-thru
Digital exercise machine
6%
11%
9%
22%
16%
23%
User
growth
76%
70%
69%
71%
72%
69%
Intent to
continue
Remote learning: myself 27% 77%
Buy online for in-store pickup 25% 73%
In-store self-checkout 23% 88%
Restaurant delivery 18% 64%
TikTok 17% 64%
Video chat: personal 14% 65%
Playing online games 14% 59%
Source: McKinsey & Company COVID-19 KSA Consumer Pulse Survey 6/16–6/18/2020, n = 514 sampled and weighted to match KSA's general population 18+ years

Saudis are planning to increase out-of-home activities in the next
two weeks
Consumers’ engagement with activities outside home1
% of respondents
1 Q: Did you leave your house for the following activities over the past two weeks? Chart represents the percentage of respondents who indicated that they left home at least once during the past week to do this activity. Q: For which of the
following activities do you intend to leave your home to do in the next two weeks? Chart represents % of respondents who intend to leave their home to do this activity during the next two weeks.
78%
46%
38%
19%
17%
16%
13%
13%
12%
11%
10%
10%
9%
7%
6%
Drive more than 2 hours from home
Get together with friends
Shop for groceries/necessities
Go to a hair or nail salon
Get together with family
Dine-in at a restaurant or bar
Work outside my home
Shop for non-necessities
Use ride-sharing service
Visit a crowded outdoor public place
Use public transportation
Go out for family entertainment
Travel by airplane
Go to the gym or fitness studio
Attend a large event
Past 2 weeks Next 2 weeks
72%
50%
41%
26%
17%
21%
19%
17%
17%
12%
17%
14%
16%
14%
11%

Most Saudis are concerned about out-of-home activities,
particularly going to crowded events and using shared services
Consumers’ worries about out-of-home activities in the next two weeks1
% of respondents
1 Q: How worried would you be if you were to do the following activities in the next two weeks? Possible answers: “not worried at all”; “not very worried”; “somewhat worried”; “very worried”; “extremely worried.” Figures may not sum to 100% of
rounding.
3 Level of concern is calculated by subtracting the % of respondents stating they are “not worried at all” and “not very worried” from “very worried” and “extremely worried.”
Level of concern2
28%
25%
22%
21%
18%
17%
17%
11%
12%
13%
11%
12%
13%
12%
12%
11%
11%
9%
9%
39%
32%
34%
35%
35%
31%
26%
27%
25%
25%
26%
25%
23%
24%
22%
22%
22%
22%
17%
32%
43%
44%
45%
48%
52%
57%
62%
62%
63%
63%
63%
64%
64%
66%
67%
68%
68%
74%
Get together with family
Drive more than 2 hours from home
Shop for groceries/necessities
Go to a hair or nail salon
Dine-in at a restaurant or bar
Work outside my home
Shop for non-necessities
Go to a shopping mall
Use public transportation
Rent a short-term home
Get together with friends
Go out for family entertainment
Travel by airplane
Use ride-sharing service
Stay in a hotel
Visit a crowded outdoor public place
Use a clothing rental service
Go to the gym or fitness studio
Attend a large event
Not worried Somewhat worried Worried
+4
+18
+22
+24
+35
+30
+40
+51
+50
+51
+52
+50
+52
+51
+54
+56
+59
+57
+65

Milestones for the KSA population not yet engaging with out-of-home activities1
% of respondents awaiting each milestone before engaging
Of consumers waiting to restart out-of-home activities, 77 percent
are waiting for milestones beyond the lifting of restrictions
1 Q: Which best describes when you will regularly return to stores, restaurants, and other out-of-home activities? Chart rebased to exclude those already participating in these activities and those who do not deem any of these items important.
Figures may not sum to 100% because of rounding.
6215
23
Only once there’s a
vaccine or treatment
Government lifts
restriction + other
requirement
Government lifts restrictions
Medical authorities deem safe 30%
Stores, restaurants, and other indoor
places start taking safety measures 21%
I see other people returning 11%
Government lifts restrictions and…
94%
of people are
not currently
engaging in
regular
out-of-home
activities

Protective equipment and sanitization are most important to
consumers as they decide where to shop in-store
Top priorities when deciding where to shop in-store1
% of respondents for whom this criterion is the most important2
1 Q: Once restrictions lift, which of the following factors will be most important to you as you decide which of these places to visit in person? Respondents were asked to select the most important.
2 The following categories are included in each bucket: Cleaning and sanitization—increased cleaning, improved air filtration, availability of sanitizing supplies throughout the store; Health checks—customer wellness check (e.g., temperature) on
entry, employees' wellness check (e.g., temperature) on entry; Masks and barriers—customers and employees wear masks, customers and employees provided masks and gloves, plastic barrier with cashier; No-contact purchasing—curbside
pick-up, cashier-less checkout, no contact delivery, buy online for pickup in store; Physical distancing—customer number limit, distancing in customer line, reduced employee activity during shopping hours; Store regulations—no customer product
testing, one-way store aisles, special hours for high-risk shoppers.
25%
19%
19%
15%
14%
8%
Masks and barriers
No-contact purchasing
Cleaning and sanitization
Health checks
Physical distancing
Store regulations

Which best describes how often you are doing each of the following items1
% of respondents
1 Q: Which best describes how often you are doing each of the following items? Possible answers: “doing less since coronavirus started”; “doing about the same since coronavirus started”; “doing more since coronavirus started.”
Figures may not sum to 100% because of rounding.
Saudis have started focusing more on healthy packaging and how
companies treat their employees when deciding on brands to buy
8%
10%
10%
11%
13%
40%
45%
52%
54%
55%
52%
45%
37%
35%
32%
Retailers promotion of sustainable solutions
Healthy and hygienic packaging
How companies take care of the safety of their employees
100%
Sustainable/eco-friendly products
Company’s purpose/values
Doing less Doing about the same Doing more
Buying based on…

Disclaimer
McKinsey does not provide legal, medical, or other regulated advice or
guarantee results. These materials reflect general insight and best practice
based on information currently available and do not contain all of the
information needed to determine a future course of action. Such information
has not been generated or independently verified by McKinsey and is
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expressly disclaims any liability with respect thereto.

McKinsey Survey: Saudi consumer sentiment during the coronavirus crisis

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McKinsey Survey: Saudi consumer sentiment during the coronavirus crisis

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