The impact of Covid-19 on consumer consumption. How does Covid-19 affect consumers' product preferences? -A cross-country comparison between The Netherlands and Sweden. Akter Lipi, Shajada Khales, Ouasim School of Business, Society & Engineering Master Thesis in Business Administration Supervisor: Edward Gillmore FOA403 Date: 03-06-2021 15 credits Abstract Date: 03-06-2021 Level: Master thesis in Business Administration, 15 credits Institution: School of Business, Society and Engineering, Mälardalen University Authors: Shajada Akter Lipi Ouasim Khales (1991/12/20) (1994/01/23) Title: The impact of Covid-19 on consumer consumption. How does Covid-19 affect consumers' product preferences? A country comparison between The Netherlands and Sweden. Tutor: Edward Gillmore Keywords: Product preferences, Consumer behavior, Buying behavior, Panic buying, Product consumption, Covid-19 pandemic. Research question: The impact of Covid-19 on consumer consumption. How does Covid-19 affect consumers' product preferences? Background: At the beginning of 2020, a global crisis hit in the name of Covid-19. As a result, many countries in the world closed their borders, economies went into recession, supermarkets, shops, pharmacies faced panic shopping behavior where consumers experienced empty store shelves and products were stock out. The pandemic forced retailers to limit the number of purchases of high- demand products. As consumption on product preferences changes in a crisis, it would be interesting for the researcher to explore the impact of global health crises on consumption. This paper gives an overview of the recent changes in consumption patterns that occurred due to Covid-19 and how consumer behavior on product preferences changed because of the crisis. Purpose: This study aims to investigate the impact of the recent Covid-19 pandemic on consumer’s product preferences towards food and clothes, the impact on product supplies, and governmental restrictions between the Netherlands and Sweden. Method: Data was gathered through semi-structured interviews with 7 people living in The Netherlands and 7 people living in Sweden. Conclusion: The findings indicated aspects of consumer behavior, buying behavior, product consumption, and factors affecting buying behavior became tied to the pandemic in the context of the health aspect of Covid-19. There were not many changes in food consumption, there were large shifts in clothes consumption. It became evident that consumers favored certain products during the pandemic. Acknowledgments First and foremost, we would like to thank our thesis instructor Edward Gilmore for his constant support and help as well as for his constructive feedback and guidance throughout the whole time. All this time invested during the collaboration to write this thesis is much appreciated. We would like to express our gratitude to our family, friends and spouses for their encouragement, emotional support, and motivation. We would like to thank all participants who only made it possible to conduct our research by providing valuable data and insights during these difficult times. We would like to thank our opponents and fellow students for giving us useful and precious feedback. This helped us writing the thesis and ensured we delivered the best results possible. Thank you Shajada Akter Lipi Ouasim Khales Table of Contents 1. Introduction 1 1.1 Background 1 1.2 Problem Discussion 3 1.3 Purpose 5 1.4 Research Question 6 2. Literature Review 7 2.1 Consumer behavior 7 2.2 Buying behavior 8 2.2.1 Buying behavior during a crisis 9 2.2.2 Factors influencing consumer buying behavior 10 2.3 Product consumption 12 2.3.1 Changes in product consumption during a crisis 12 3. Methodology 14 3.1 Research strategy 14 3.2 Research design 15 3.3 Epistemology 16 3.4 Data collection 18 3.4.1 Primary data collection 18 3.4.2 Secondary data collection 20 3.5 Data analysis 20 3.6 Ethical considerations 22 4. Findings 23 4.1 Sweden 23 4.1.1 Demographics 23 4.1.2 Swedish Culture 24 4.1.3 Food and Clothes 25 4.1.4 Background of Covid-19 25 4.1.5 Impact on Swedish consumers 27 4.1.6 Impacts on buying behavior 29 4.1.7 Factors affecting or influencing consumer buying during Covid-19 30 4.1.8 The impact of the pandemic on product consumption 32 4.2 The Netherlands 35 4.2.1 Demographics 35 4.2.2 Dutch Culture 35 4.2.3 Food and Clothes 36 4.2.4 Background of Covid-19 37 4.2.5 Impact on Dutch consumers 38 4.2.6 Impact on buying behavior 39 4.2.7 Factors affecting or influencing consumer buying behavior during Covid-19 40 4.2.8 The Impact of the pandemic on product consumption 41 5. Discussion 44 5.1 Impact on consumers 44 5.2 Impact on buying behavior 45 5.3 Factors affecting or influencing consumer buying behavior during Covid-19 47 5.4 The impact of the pandemic on product consumption 49 6. Conclusion 51 6.1 Theoretical Implications 52 6.2 Practical Implications 53 6.3 Limitation 53 6.4 Future Research 54 References 55 Appendices 65 Appendix A: Interview guide 65 Appendix B: Transcriptions 67 Swedish respondents 67 Dutch respondents 90 1. Introduction This chapter will provide a general introductory overview of the thesis. It will start with a brief background of the thesis and then will go into the problem discussion to highlight the importance of the research topic. The chapter will end with the purpose of the study and research question. 1.1 Background In recent world history, people have faced many epidemic outbreaks, for example, Ebola, SARS, MERS, Spanish flu. Most outbreaks have had a greater impact on two categories of human behavior: first, consumer behavior and second, health risk mitigation behavior (Laato et al., 2020). On March 4, 1918, Albert Gitchel was declared as the first person in world history that was affected by coughing, a fever, and a headache which was later identified as the Spanish flu. At the time, he was working as a cook at Camp Fuston in Kansas. Within three weeks, 1100 soldiers had been hospitalized with more people affected. This spread to different countries like Spain, France, Great Britain and Italy. In August 1918, important measures were taken to control the spread of the Spanish flu by making limitations on public transport, people were restricted to visit shops and meeting people in public places. Measures were taken such as street cleaning, disinfecting of public places (Martini et al., 2019). WHO (World Health Organization) reported (SARS) severe acute respiratory syndrome disease cases on April 22, 2003. Most cases were found in China, Hong Kong, Singapore, Vietnam, Toronto, Canada and Taiwan (Hsieh et al., 2004). As a result of the outbreak's rapid spread, the local and regional economies were impacted. SARS was quickly recognized by the WHO and they issued several recommendations to control the outbreak. Hong Kong was the first city affected by SARS, and its healthcare community suffered heavily from the disease (LeDuc & Barry, 2004). On March 23, 2014, WHO was notified about the Ebola virus disease, and on August 8, 2014, they declared an outbreak of Ebola virus disease (EVD) in Guinea. Approximately 4507 cases and 2296 deaths were reported by September 14, 2014, from West Africa like Guinea, Liberia, Nigeria, Senegal, and Sierra Leone (WHO Ebola Response Team, 2014). In September 2012, a novel coronavirus was found in a patient who died in Saudi Arabia because of acute respiratory distress and acute kidney injury, but the analysis revealed the disease was due to a novel virus which was named Middle East 1 Respiratory Coronavirus (MERS-CoV). The WHO had been informed of many cases and deaths and the cases spread to 27 countries (Al-Omari et al., 2019). The WHO declared Covid-19 (Coronavirus Disease-2019) as an infectious disease with a global pandemic outbreak on the 11th of March 2020. The disease originated from Wuhan China and was caused by SARS-coV-2 (severe acute respiratory syndrome coronavirus 2). It had rapidly spread into 196 countries and territories. For that reason, most countries took immediate decisions regarding safety measures and strict restrictions on people's daily lives, for example, social distancing, working from home, temporarily closing businesses, schools, colleges, universities, and remote working to slow down the transmission of the virus (Ben Hassen et al., 2020). The activity of human life is affected due to the crisis which changes social, economic, and cultural perspectives for the long term. Covid-19 is a global health crisis that is already having a greater impact on the world economy. The effects of pandemics vary from country to country. It depends on the general health of the population, the evolution of disease cases, development and modernization of national health care systems, and economic level. The global world takes several measures to manage the medical crisis which affects the world economy. In a normal situation, the products a consumer wants to buy depend on their intrinsic and extrinsic characteristics. However, in the context of a global pandemic like Covid-19, consumers are changing their preferences for products, changing their lifestyle and business environment too. The challenges faced by the healthcare system also affect people's living standards and economic stability (Stanciu et al., 2020). The global outbreak of Covid-19 affected human life and the physical world. It brought several effects on the environment, both positively and negatively. Due to strict restrictions to control the spread of the virus, air quality has increased in many cities because of fewer social gatherings and economic activities, and water pollution has decreased in many countries in the world. On the other hand, the use of PPE (personal protective equipment) is increasing every day for pandemics such as facemasks, hand gloves which impact the environment (Rume & Islam, 2020).