|
25 April 2006
New York, NY, USA
When the cost of living is rising faster than income, the world’s consumers are fairly unanimous about what they’d cut back on to avoid blowing their budget. Out-of-home entertainment, spending on new clothes and upgrading technology are the top three belt-tightening measures of consumers worldwide, according to an online survey by ACNielsen, the world’s leading market research and information company.
The survey, conducted in November 2005, polled over 23,500 respondents – regular Internet users – in 42 markets. In the United States, unlike most markets surveyed, consumers cited cutting down on take-out meals as their most popular cost-cutting method. Just over half of all respondents worldwide claimed they would cut down on out-of-home entertainment (57%) and spend less on new clothes (53%) to stay within their budgets, with nearly half (48%) also saying they would delay upgrading technology to tighten their belts.
In the US, while the economy remains fairly robust and unemployment is low but median wages are flat, consumers seem not to be employing cost-saving strategies to a large degree, or if they are, are spending the saved funds almost immediately. In fact, earlier this year, the U.S. Commerce Department reported that American consumers spent more than they earned in 2005 for the first time since the Great Depression.
Across the five regions surveyed, consumer priorities varied, most notably in North America. While out-of-home entertainment was the first thing consumers would cut down on in Latin America (61%), Asia Pacific (58%) and Europe (54%), in North America, the first thing to go for 70 percent of Canadians and 66 percent of Americans would be the take-out meals, ahead of out-of-home entertainment, which ranked second. Moreover, North Americans cited ‘trying to save on gas and electricity’ as their third preferred cost-saving measure (see Table 1).
Cross-referencing these belt-tightening measures with an earlier ACNielsen survey about how consumers spend spare cash once essential living expenses have been take care of, it is clear to see that Europeans are strongly determined not to give up their quality of life, with holidays and home improvements high on their priority spending list and among the least likely expenses to be cut when the going gets tough. Similarly, people in Asia Pacific are pretty determined to stick to their holiday plans and Latin Americans are addicted to upgrading to new technologies.
Table 1: Top Three Cost Saving Measures by Region
|
N. America |
Europe |
Asia Pacific |
LatAm |
Other |
1 |
Take-out
|
Entertainment |
Entertainment |
Entertainment |
Entertainment |
2 |
Entertainment |
Clothes |
Technology |
Take-out |
Clothes |
3 |
Gas/Electric |
Technology |
Clothes |
Clothes |
Technology |
“To a degree, belt-tightening strategies are a reflection of lifestyles in each region, and the potential for where the biggest saving can be made,” noted Tom Markert, Chief Marketing Officer, ACNielsen. “It also reflects priorities – where consumers will look first to cut back, and also where they are not prepared to make concessions. In the US, the enormous amount of take-out food we consume, the billions we spend on out-of-home entertainment and as the world’s largest user of energy, these three areas may be the big budget numbers that can be reduced without too much lifestyle compromise. Based on the country’s negative national savings rate, however, any money saved by US consumers is probably simply spent in other areas.”
Implications for Marketers of Consumer Packaged Goods
For retailers and manufacturers involved in the marketing of consumer packaged goods to the US consumer, there are two survey points of particular interest. First, when asked if they would switch to cheaper grocery brands, 42% identified it as a cost saving strategy. Not surprisingly with the rising power of hard-discount retailers in Europe, European consumers scored the highest in this area (France 57%, Portugal 52%, Austria & the Netherlands 51%), but the US only just missed cracking the top 10 and was well above the global average of 35%. Second, the US was the clear leader in identifying the use of coupons as a cost-saving strategy at 46%, far ahead of the global average of 19% (see Table 2 for a complete list of US responses versus global averages).
“We believe the strong numbers in the ‘cheaper grocery brands’ response is clearly tied to the rise of private label goods throughout the US and the world, both in terms of amounts spent and categories now included,” noted Markert. “I believe the US will crack the top 10 in this area in the not too distant future, especially if some of the hard discounters that have enjoyed so much success in Europe make a bigger push into the US market.”
In terms of coupon use, Markert noted, “The US consumer clearly recognizes coupon usage as a meaningful cost saving strategy. Both manufacturers and retailers of consumer packaged goods have long leveraged coupons to build trial, volume and store traffic, but it may be time to hone the marketing messages about coupons to stress the impact they can have on overall cost savings for household budgets.”
Table 2: Cost Saving Measures – United States vs Global Average
| Cost Saving Measure |
United States |
Global Average |
Cut down on take-out meals
|
66%
|
44% |
| Try to save on gas and electricity |
61% |
37% |
| Cut down on out of home entertainment |
60% |
57% |
| Spend less on new clothes |
54% |
53% |
| Use vehicle less often |
47% |
27% |
| Use coupons more often |
46% |
19% |
| Switch to cheaper grocery brands |
42% |
35% |
| Delay upgrading technology |
41% |
48% |
| Cut out annual vacation |
38% |
29% |
| Delay the replacement of major household items |
37%
|
36% |
| Cut down on telephone expenses |
24% |
34% |
| Look for better deals on home loans, insurance, credit cards |
16% |
17% |
| Buy cheaper brands of alcohol |
8% |
8% |
Cut down on smoking
|
8% |
10% |
| Something else |
7% |
7% |
| I don’t take any actions |
4% |
4% |
About the Survey
The ACNielsen Online Consumer Confidence Survey, the largest twice-yearly global survey of its kind, is aimed to gauge consumers’ current confidence levels, spending habits/intentions and current major concerns. The most recent wave of the survey took place in November 2005 and polled over 23,500 consumers – regular Internet users – in 42 markets: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, South Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, UAE, United Kingdom, and the United States. The sample size in most markets was approximately 500, although 1,000 consumers were surveyed in each of the following markets: China, France, Germany, the United Kingdom, and the United States. The survey has a margin of error of plus or minus 4.4% in markets with a sample size of 500, and plus or minus 3.1% where there was a sample size of 1,000.
About ACNielsen
ACNielsen, a VNU business, is the world's leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.
Back to Top
|
