Business Trends

Consumer Behavior Trends Sparked By Recession

In Consumer Trends, economy, Uncategorized on July 27, 2009 at 6:29 pm

Americans Spending Differently

According to Research and Markets, 90% of US consumers believe that they are currently living in a recession. This is indicative of an intensifying recessionary mindset influencing consumer behavior. Symptomatic of falling consumer confidence is the fact that more than one-in-three US consumers experienced a worsening financial situation, falling job security and falling confidence in the housing market in 2008-09.

The study shows that:

•56% of US consumers feel that their lifestyle has been impacted by the recession. Suddenly, they have been forced to re-evaluate their spending, including where they do their grocery shopping as well as their in-store choices.

•44% of US shoppers are frequent buyers of private label products. Many are now likely to consider private label products to be on a par, if not better than market leading brands across sectors.

•For 72% of US shoppers, lower prices have a high amount of influence over where people do their shopping. Nevertheless, the quality of products sold similar influence over their (changeable) grocery shopping destinations. This is symptomatic of the intensifying value-consciousness across FMCG product sectors.

Women More Likely To Pinch Pennies

Women are cutting back more on discretionary expenditures than men in poor economic times, according to a new survey conducted by Opinion Research Corporation. Of those who participated in the survey, 86 percent of women reported spending less on elective expenditures compared to 78 percent of men.

When asked specifically about the lifestyle changes that have been made in the past 12 months due to the current economic environment, those surveyed provided the following responses:

•58 percent of women are eating out less, compared to 48 percent of men
•54 percent of women are buying fewer clothes and shoes, compared to 40 percent of men
•48 percent of women are shopping more at discount stores, compared to 37 percent of men
•36 percent of women are cutting back on charitable giving, compared to 26 percent of men
•31 percent of women have cancelled or postponed vacations, compared to 22 percent of men
Additionally, the survey found that 22 percent of men reported making none of these lifestyle changes, compared to 14 percent of women.

“More and more women are now responsible for managing the family’s finances, and they are more cost-conscious as the economy tightens their purse strings,” said Paula DeLaurentis, managing director, strategic alliances, TD AMERITRADE. “As a result, women are cutting back on daily expenditures and luxuries now more than ever.”

The survey also revealed that the down economy has affected the lifestyles of people living in the Northeast during the past 12 months, more so than any other region in the United States, particularly the West.

Key findings include:

•52 percent of those surveyed from the Northeast have postponed a major purchase compared to 39 percent of those from the West.
•19 percent of those surveyed from the Northeast have postponed adding to the family, such as, pregnancy, adoption and foster children, compared to 7 percent of those from the West.
•50 percent of those surveyed from the Northeast are buying fewer clothes or shoes compared to 44 percent of those from the West.

Strain on Career and Relationships

The recession is also splitting up and straining more marriages and relationships in America than in eight other major nations, according to a global survey commissioned by ING DIRECT. More Americans also believe that they will have to work at least ten more years before retiring – more than any other surveyed country. Yet, Americans are the least likely to sacrifice things people in other leading nations are willing to give up like their cars and pets to save money.

Nearly three in ten Americans (29 percent) say the recession has “added stress to,” “strained,” or even “ruined” their marriage/relationship. American love lives have been the hardest hit compared to just 12 percent in Germany, 24 percent in France and 23 percent in Canada.

Americans are not just feeling the economic pressure at home; it appears to be affecting their retirement plans too. Forty percent of Americans say the current economic situation will cause them to retire at a later age. Of those Americans who said they will retire later, 34 percent think they will have to work ten or more years than originally planned.

“Whether it’s at home, in the boardroom or in the car showroom, people around the globe are affected by the recession,” said Arkadi Kuhlmann, President of ING DIRECT USA. “The long term benefit is that people are cutting costs, saving more money, and learning to build a financial buffer for their future. Clearly, some of these global trends need to become a habit.”

In general, people around the globe agree that food is the last thing they would sacrifice to save money, but no nation loves their vehicles and pets more than America. Interestingly, a recent report from market research firm IBISWorld indicates that despite the recession, families purchasing dogs and cats as pets has actually increased by 2.4 percent since last year.

When asked to name the last three things they would sacrifice to save money, 30 percent of Americans said their vehicle. Only Brits (30 percent) love their cars as much, while Italians (14 percent) and Spaniards (18 percent) are more willing to unload their vehicle. In the US, nearly a quarter of Americans (22 percent) put a high priority on pets compared to Canadians (17 percent), French (15 percent) and Italians (12 percent).

Other sociological savings trends from the study include:

Having a financial buffer in case of emergency is the most important saving goal

Austria – 53 percent
France – 43 percent
USA – 35 percent (#1 saving goal)

 

Retirement is the most important saving goal

USA – 16 percent (#3 saving goal)
UK – 6 percent
Italy – 2 percent

Avoid credit card purchases to save money

USA – 46 percent
Germany – 11 percent
Italy – 17 percent

Cooking at home, bringing lunch to work to save money

USA – 51 percent
Canada – 44 percent
Italy – 20 percent

 The online survey was commissioned by ING DIRECT and conducted by TNS in nine countries where ING DIRECT operates, including Australia, Canada, United States, United Kingdom, France, Germany, Italy, Spain and Austria. In the United States, the survey took place between May 26 – June 9, 2009 among 1,052 adults age 18+.

 

For Research and Market’s full report, “The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors in the United States”, click here.

For IBISWorld’s full report, “Economic Crisis: When Will It End?”, click here.

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