War in Ukraine:
Perspectiveon Consumer\\
Sentiment
BCG Global Advantage Practice Area, Center for
Customer Insight
Prepared: 26 May 2022

Prepared: 26 May 2022

Introduction to this document

Moreover, the continuity of the war has
resulted in profound economic impact, notonly within Ukraine but globally—as supply
chains face disruption, commodity prices
rise, and unprecedented levels of sanctions
take hold.

We continue to lean into the most pressing
issues and questions on the minds of ourclients and teams.
This edition shares a deep dive into theConsumer Sentiment through our survey of
9,000 consumers across 11 markets globally.
Our snapshot sheds light on current consumer
concerns and silver linings, as well as
implications for business leaders.

2

Copyright © 2022 by Boston Consulting Group. All rights reserved.

The war continues to be first andforemost a humanitarian crisis, and the
top priority for all continues to be the safety
and security of people.

Prepared: 26 May 2022

AGENDA

Perspective on Consumer Sentiment
Global Consumer Sentiment trends
Selected regional insights
Implications for leaders

Copyright © 2022 by Boston Consulting Group. All rights reserved.

War in Ukraine:
Global Update
and Consumer
Sentiment3Prepared: 26 May 2022

Introduction to BCG Consumer Sentiment Snapshot

What is Consumer
Sentiment?

Periodic snapshot of
consumer perceptions,behavior & spending
changes at a given time

Comparison of
consumers between
different markets

Methodology>9,000 respondents

11 focus markets, including the USA,
China, European and emerging markets

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Assessment ofunderlying causes forevolving consumer
sentiment

Conducted online inlate April/May 2022

Source: BCG analysis.

4Prepared: 26 May 2022

Summary | Trends & Implications of the War in Ukraine
GlobaltrendsWe see muted current consumer sentiment across the world, but for different reasons• The War in Ukraine is top of mind for consumers, although its impact is perceived most acutely in Europe and the US• Concern about inflation is the most global issue, with ~70% of consumers concerned about potential economic impact• Lingering COVID concerns remain in select markets (China and Japan), though most consumers feel "the worst is over"• Uncertainty forcing consumers to prioritize spending on essentials in the short term, and adding pressure on personal finances
However, silver linings emerge when we examine the forward-looking picture for the consumer sentiment• Consumers are optimistic about Covid recovery, except for some of the more severely affected markets (e.g., China)• Digital momentum continues to pick up speed as 1 in 3 consumers expect to step up online spending further

Regional
insights

US | Concerns about inflation & potential recession drive buying behavior to affordability; Covid recovery and digital are silver linings
China | Consumers mainly concerned about Covid impact but relatively optimistic and resilient on all other accounts
Europe1 | Few silver linings for European countries as war, inflation, recession and financial insecurity pose significant threats
Japan | Cautious sentiment due to pandemic, inflation and recession concerns; Japanese consumers usually show caution
Emerging markets2 | Wide range of sentiment from muted in Brazil to more buoyant in India; digital adoption showing strong growth

Implications

5 areas of business action: (1) deaverage by market & product, (2) understand drivers of buying behavior shifts,(3) ensure availability through supply chain resilience, (4) employ dynamic pricing, and (5) invest in digital marketing strategies

1. Countries covered: UK, Germany, France, Sweden 2. Countries covered: Brazil, Indonesia, India

5

Copyright © 2022 by Boston Consulting Group. All rights reserved.

• Pent-up demand strong as 3 in 4 consumers globally expect to purchase more or the same over the next six months.
Highest pent-up demand expected in discretionary leisure categories like travel, eating out, live events or apparelPrepared: 26 May 2022

AGENDA

Perspective on Consumer Sentiment
Global Consumer Sentiment trends
Selected regional insights
Implications for leaders

Copyright © 2022 by Boston Consulting Group. All rights reserved.

War in Ukraine:
Global Update
and Consumer
Sentiment

6Prepared: 26 May 2022

Sentiment | Consumer sentiment is muted globally at the moment, but fordifferent reasons across regions
Concernranking

US

China

FranceGermany

Sweden

UK

Japan

India

BrazilIndonesia

12
Copyright © 2022 by Boston Consulting Group. All rights reserved.

3
4
Ukraine War

Inflation

Potential recession

Covid
7

Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Prepared: 26 May 2022

Sentiment | The War in Ukraine is top of mind for consumers, although its
impact is perceived differently across regions

War in Ukraine is the most
repeated concept when asked
about concerns on current
state of the world

Most consumers see the conflictpersisting, but more limited impact
in their countries% of Strongly Agree and Agree

Perceptions are
mixed depending on
country exposure
Germany

USA

China

Believe the conflict willcontinue for a long time

83%

76% 61%

73%

63% 41%

Copyright © 2022 by Boston Consulting Group. All rights reserved.

79%

60%
Think consumers in theircountry are suffering due
to politics of the conflict

8
Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Prepared: 26 May 2022

Sentiment | Concern about inflation pressure persists, with most consumers
concerned about potential economic impact
Concern about inflation pressures persists

Consumers weary about potential recession% of Strongly Agree and Agree% of Strongly Agree and Agree

Category group

Price increase% who perceived increase

Essentials Food

87%

Essentials Non-Food

76%

Health & Wellness

70%

Discretionary expenses

72%

73%

Worry that the world will struggle
with economic recession
Most concerned countries

82%
Brazil60%

80%
Indonesia

80%
Germany
Copyright © 2022 by Boston Consulting Group. All rights reserved.

concerned by price increases,
83% Areperceived across categories

Think there will be an economic
recession in their country
Most concerned countries

69%
UK

69%
USA

66%
India

9
Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Prepared: 26 May 2022

Sentiment | Uncertainty is forcing consumers to prioritize spending on
essentials in the short term, and adding pressure on personal finances

prices increases will accelerate or keep rate
65% Believe
across all categories
Category group

Price increase

Spend shift% who perceived increase% who spend more today vs last 6 months

Essentials Food

87%

Essentials Non-Food

76%

Health & Wellness

70%

Discretionary
expenses

72%

+26%

…and pressures personal
finances% of Strongly Agree and Agree65%
Worried about personal finances

+19%

41%

+5%
-11%

Say their savings have decreased
10Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Uncertainty affects consumption mix shift to essentials…

Prepared: 26 May 2022

Silver linings | Consumers are optimistic about Covid recovery, except for
those in some of the more severely affected markets…except in some most affected markets
Consumers are optimistic about Covid
recovery and return to normalcy…

Difference between respondents who strongly agree / agree within the
country and those who strongly/agree among total global respondents

Optimistic

Pessimistic

Sweden

UK

China

Japan

Covid-related consumer sentiment% of Strongly Agree and Agree

47% Less worried about the impact of Covid

+2%

+11%

+9%

+18%

0%

-4%

-21%
Copyright © 2022 by Boston Consulting Group. All rights reserved.

worst of the Covid pandemic
51% Believe
is over-38%

11
Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Prepared: 26 May 2022

~3 in 4

Top & bottom categories where consumers intend to spend more
% of people expecting to spend more in next 6 months than today1Highgrowth20%

Vacation/leisure travel
Eating at restaurants

14%

Movies at cinema hall

14%

Women's clothing

14%

Spas, theme parks, concerts
0%

Low
growth13%
Subscription for paid videos on platforms-2%

Food delivery from restaurants-2%

Tobacco & smoking supplies-2%

Vitamins, minerals, herbs or supplements-4%

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Silver linings |High intention
to spend in
discretionary
categories suchas travel, eatingout, apparelor leisure shows
evidence of pentup demandpeople indicated they are going to spend more or
the same over the next 6 months

Utilities

1. Calculated by subtracting the % of respondents who said they would purchase these categories less in the next six months from the % of
respondents who said they would purchase these categories more in the next six months. Source: Survey conducted in April 15-22, 2022 in
USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

12Prepared: 26 May 2022

Silver linings | Digital momentum persists beyond Covid as 1 in 3
consumers expect to purchase more online in the next six months
Future | 1 in 3
will increase
online & digitalspend further

Used since last 6 months,
at least occasionally

Plan to increasein next 6 months

Purchase
online81%

31%

Use digital
payments

81%

39%

India and USA will experienceeven higher adoption growthaccording to consumers
Difference between % respondents intending to increase
online spend in next 6 months in the country vs overall
India

USA

+19%

+28%

+12%

+11%

13
Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Consumer
habitsToday | Most
consumers
spend online
and digitally

Prepared: 26 May 2022

AGENDA

Perspective on Consumer Sentiment
Global Consumer Sentiment trends
Selected regional insights
Implications for leaders
Copyright © 2022 by Boston Consulting Group. All rights reserved.

War in Ukraine:
Global Update
and Consumer
Sentiment

14

Prepared: 26 May 2022

Consumer Sentiment developed in Regional Dashboards

Regional Consumer Sentiment Dashboards

1 Evaluated concern & sentiment quantitatively
War | Concerned about Ukraine War & impact in home countries
Personal finances | Concerned about finances and savings
Inflation | Concerned about price increases and their continuity
Pandemic | Concerned about Covid impact and return to normal
Potential recession | Concerned about recessions globally & in country

1

3

Other trends | Other relevant trends highlighted in the survey for the
specific geography (e.g., digital channel growth)

Copyright © 2022 by Boston Consulting Group. All rights reserved.

2Pent-up demand | Expected to spend more in certain categories
in the next 6 months, and country-specific demand trends

2 Evaluated concern qualitatively
Average | Equal to total average or within 2% above or below
Below | Positive sentiment, >2% below total average
Above | Negative sentiment, >2% above total average

3 Distilled region-specific takeaways to support decisions

15

Prepared: 26 May 2022

US | Concerns about inflation and potential recession drive buying
behavior towards affordability; Covid recovery and digital are silver linings

Global average

AverageBelow

63% War

46% Personal finances

80% Inflation

52% Pandemic

72% Potential recession

Above

Key takeaways
Consumers increasingly worried about
inflation and potential recession; personal
finances have not yet been severely affected

Consumers increasingly trading down for more
affordable brands & deals/promotions

Other trends+34%Pent-up demand | % of respondents
expecting to spend more in next 6 months1

expect to increase use of digitalchannels & online payments

CinemasEventsHome furnishings
Cosmetics-9 %Alcohol-10 %Food staples
-13 %

44%

19 %
15 %
12 %

are buying on deals andpromotions

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Concerns & sentiment

Covid recovery optimism driving pent-up
demand for discretionary spending (e.g.,sporting events, travel & leisure)

Online spend will continue to grow as
digital adoption gains long-term traction
following Covid highs

1. Calculated by subtracting the % of respondents who said they would purchase these categories less in the next six months from the % of respondents who said they would purchase these categories more in the next six
months. Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

16Prepared: 26 May 2022

China | Consumers mainly concerned about Covid impact but relatively
optimistic and resilient on all other accounts

Global average

AverageBelow

41% War

40% Personal finances

56% Inflation

60% Pandemic

44% Potential recession

Above

Other trends

Pent-up demand1 | % of respondents

Sentiment less affected by war, inflationand potential recessions, signaling theresilience of the Chinese market
Covid remains main concern, an outlier
Spending currently focused on essentials
as consumers concerned over lockdowns+14%

expecting to spend more in next 12 months2

expect to increase use of digitalchannels & online payments

Fresh food
Personal & home care
Packaged foodRecreational services-18 %Lifestyle services-19 %Travel
-26 %

56%

32 %
22 %
20 %

Key takeaways

experiencing foodessentials price hikes

Digital spending habits expected to growdespite existing high adoption rate
New digital channels (e.g., community
commerce) to substitute traditional digitalchannels

1. Specific BCG survey ran in China in May 2022. 2. Calculated by subtracting the % of respondents who said they would purchase these categories less in the next six months from the % of respondents who said theywould purchase these categories more in the next 12 months. Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

17

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Concerns & sentimentPrepared: 26 May 2022

Europe1 | Few silver linings for European countries as war, inflation,
recession and financial insecurity pose significant threats

Global average

AverageBelow

67% War

53% Personal finances

79% Inflation

54% Pandemic

68% Potential recession

Other trends

Pent-up demand | % of respondents
expecting to spend more in next 6 months2
Travel (leisure)
Women’s clothing
Cosmetics
Cars-1 %Utilities-2 %Vitamins, etc.
-2 %

Above

17 %
14 %
13 %

82%
experiencing foodessentials price hikes

55%of European consumers are
not concerned about
travelling internationally

Key takeaways
Consumers most worried about direct impact
of Ukraine War and recession potential
Inflation concern drives personal financial
insecurity and current spending mix shift toessentials & food

European consumers positive about Covid
recovery
Return to normalcy drives pent-up demand
for travel and leisure

1. Countries covered: UK, Germany, France, Sweden. 2. Calculated by subtracting the % of respondents who said they would purchase these categories less in the next six months from the % of respondents who said theywould purchase these categories more in the next six months. Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

18

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Concerns & sentimentPrepared: 26 May 2022

Emerging Markets1 | Wide range of sentiment from muted in Brazil torelatively buoyant in India; digital adoption poised for strong growth
Global average

Average

Below

Above

62% War

70%

67%

49%

60% Personal
finances

50%

58%

80% Inflation

84%

79%

78%

56% Pandemic 54% 50%

63%Consumers confident worst of thepandemic is over but remain cautious

Potential
recession

69%

70%

66%

+33% Digital+29% +48% +22%

India concerns over inflation high,but most optimistic regarding pandemic

68%Pent-up demand |

71%

India

Indonesia

Travel (leisure)

32 %Travel (business)

21 %Travel (lesiure)

30 %Cinema31 %Travel (leisure)

18 %Dining24 %Events28 %Footwear

16 %Cinemas24 %Alcohol-11 %Household care

-2 %Tobacco-11 %Staples (food)-14 %Food delivery-7 %Prescriptions-12 %Baby food-8 %Vitamins, etc.

-14 %

-37 %

Economic insecurity highest in Brazil
as consumers perceive income decline

Growth in digital adoption strongest
amid recovery in discretionary spending% of respondents expecting to spend more in next 6 months2

BrazilUtilities

Key takeaways

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Concerns & sentimentSentiment primarily muted due to
inflation; pandemic remains a concern
Pent-up demand for discretionary
spending high, consumers await
pandemic to ease

1. Countries covered: Brazil, India, Indonesia 2. Calculated by subtracting the % of respondents who said they would purchase these categories less in the next six months from the % of respondents who said they wouldpurchase these categories more in the next six months. Source: Survey conducted in April 15-22, 2022 in USA, UK, Germany, France, Brazil, China, India, Indonesia, Japan, Sweden and New-Zealand, BCG analysis

19Prepared: 26 May 2022

AGENDA

Perspective on Consumer Sentiment
Global Consumer Sentiment trends
Selected regional insights
Implications for leaders

Copyright © 2022 by Boston Consulting Group. All rights reserved.

War in Ukraine:
Global Update
and Consumer
Sentiment

20

Prepared: 26 May 2022

1

Deaveraging | Deaverage consumer insights and pricing strategies by market & productsegment; use pricing ladders and portfolio strategies

2

Anticipation | Understand drivers of change in buying behavior as preferences shift amid
rising prices & pent-up demand in discretionary categories such as travel/leisure, clothing

3

Availability | Ensure supply chains are ready to meet short-term pent-up consumer
demand in Covid-hit goods; build long-term supply chain resiliency

4

Pricing | Apply dynamic pricing (AI & data analytics) to capture opportunities in real time
while keeping in mind price elasticity constraints

5

Digital | Invest in digital marketing strategies to capture continued growth in online
consumption and adoption of digital payments; data privacy remains key priority

Sources: BCG analysis and case experience.

21

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Implications for business leaders

5 areas of business action emerge from consumer trendsPrepared: 26 May 2022

1

Deaveraging | Coca-Cola announced price hikes to offset rising costs but aims to
mitigate consumer impact through new package sizes & materials1

2

Anticipation | Walmart prioritizing better understanding changing consumer preferences
due to price pressures and adapting product offering as a result (e.g., private brands)2

3

Availability | Apple intends to expand manufacturing into India and Vietnam in effort todiversify supply chain primarily concentrated in China3

4

Pricing | Cinemark plans to move to more dynamic pricing which could lead to increaseor decrease in ticket prices based on demand4

5

Digital | Burberry launched augmented reality feature allowing consumers to try clothes
on virtually & livestreaming of fashion shows on Twitch; digital sales have grown by 50%5

1. The Coca-Cola Co. (KO) Q1 2022 Earnings Call 2. Walmart, Inc. (WMT), Q1 2023 Earnings Call, Retail Dive: Walmart's profits take a hit as fuel spikes andconsumers react to inflation 3. Wall Street Journal: Apple Looks to Boost Production Outside China 4. Cinemark Holdings, Inc. (CNK), Q1 2022 Earnings Call,
Hollywood Reporter: How Cinemark is Approaching Dynamic Ticket Pricing 5. MarketWatch: Burberry sales fall as COVID forces store closures, but strong Asia
growth buoys investors Sources: BCG analysis and case experience.

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Implications for business leadersCompanies are taking immediate actions to adapt to consumer trends

22Prepared: 26 May 2022

Teams across BCG are actively monitoring impact
Global Advantage Practice Area

Center for Customer Insight (CCI)
Kasey Maggard
Global Practice Mgmt. Director
Global Advantage
E: Maggard.Kasey@bcg.com

Aparna Bharadwaj
Managing Director & Partner
Global Leader, CCI
E: Bharadwaj.Aparna@bcg.com

Cinthia ChenManaging Director & Partner
China Lead, CCI
E: Chen.Cinthia@bcg.com

Marc Gilbert
Managing Director & Senior Partner
Global Lead, Geopolitics & Trade Impact
E: Gilbert.Marc@bcg.com

Michael McAdoo
Partner & Director
Global Trade & Investment
E: McAdoo.Michael@bcg.com

Lauren Taylor
Managing Director & Partner
NAMR Lead, Customer Centricity
E: Taylor.Lauren@bcg.com

Patrick Witschi
Associate Director
Marketing, Sales & Pricing
E: Witschi.Patrick@bcg.com

Ken Carlstedt
Associate Director
Global Trade Risk & Compliance
E: Carlstedt.Ken@bcg.com

Leandro J. Urbano
Consultant
E: Urbano.Leandro@bcg.com

Deepti Tyagi
Global Topic Manager, CCI
E: Tyagi.Deepti@bcg.com

Liz Scholz
Consultant
E: Scholz.Liz@bcg.com

Marketing, Sales & Pricing and Consumer Practice Areas
Jean-Manuel Izaret
Managing Director & Senior Partner
Global Practice Area Leader, Marketing, Sales & Pricing
E: Izaret.JeanManuel@bcg.com

Copyright © 2022 by Boston Consulting Group. All rights reserved.

Nikolaus LangManaging Director & Senior Partner
Global Practice Area Leader, Global
Advantage
E: Lang.Nikolaus@bcg.com

Aditi Bathia
Consultant, CCI
E: Bathia.Aditi@bcg.com

Rohan SajdehManaging Director & Senior Partner
Global Practice Area Leader, Consumer
E: Sajdeh.Rohan@bcg.com

23

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