The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In The Netherlands

Introduction

In April 2009, more than three quarters of Dutch consumers perceived they were living in a recession. This is indicative of the 'recessionary mindset' influencing consumer behavior. Symptomatic of falling consumer confidence is the fact that more than 25% of Dutch consumers experienced falling job security and diminishing confidence in the housing market in 2008-09

Scope

*Detailed analysis documenting Dutch consumers' 'recessionary mindset' and how this influences perceptions about current and future prospects

*Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in the Netherlands

*In-depth analysis of Dutch shoppers' changing price sensitivity, value consciousness and attitudes towards private label across 4 major FMCG sectors

*Countries and categories covered: the Netherlands; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

Highlights

Less than one-third of Dutch consumers felt 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. Nevertheless, they remain comparatively content and confident in their purchasing power

Half of Dutch shoppers are also 'frequent buyers' of private label products to save money. Many are now likely to consider private label products to be on a par, if not better than market leading brands, although this mentality does differ depending on product category

No doubt influenced by the price war in grocery retailing over the last decade, for 51% of Dutch shoppers, lower prices have a high amount of influence over where people do their most of their grocery shopping. Nevertheless, the quality of products sold has more influence over their (changeable) grocery shopping destinations

Reasons to Purchase

*Gain a detailed understanding of changing consumer attitudes and behaviors amid the downturn in order to determine appropriate recessionary strategies

*Obtain country and sector specific insight about pertinent recessionary themes such as private label and Dutch consumers' value consciousness

*Assist consumer segmentation and targeting efforts by accessing data from two waves of primary research conducted in August 2008 and April 2009

Report Highlights

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Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 3
Table of tables 4
THE FUTURE DECODED 5
INTRODUCTION: Understanding how 'recessionary mindsets' influence Dutch consumers' attitudes towards and actual consumption is vital 5
The 'recessionary mindset' of Dutch consumers in 2008-09 is reflected by the widespread belief that they are in a recession 5
The economic downturn has had an impact on the lifestyles of more than half of Dutch consumers 6
Key takeouts and implications: a 'recessionary mindset' has not been fully matched by a recessionary impact on Dutch consumers lifestyles 8
TREND: Dutch citizens remain appreciative of their quality if life even if they are conscious of a worsening economic situation 8
Dutch citizens are generally downbeat about how things are going and this appears to be negatively impacting perceptions about quality of life 9
Key takeouts and implications: the mood towards the direction of Dutch society has further dampened as the economic downturn has deepened, but Dutch citizens remain satisfied with their quality of life 11
TREND: Dutch consumers have lost confidence in their financial security and are being more scrupulous in response 11
Satisfaction with one's financial situation is low among Dutch consumers but negative sentiment is lower than consumers from elsewhere 12
Perceptions about the economy, job security, financial status and the housing market in the Netherlands have all worsened in 2008-09 and there is only limited optimism looking towards the latter end of 2009 14
Dutch consumers are managing their finances more closely with some even struggling to pay the bills 18
Dutch consumers are making greater efforts to save while negative attitudes towards credit prevail 19
Key takeouts and implications: Dutch consumers have lost satisfaction in their financial situation and there is only some optimism of any improvement coming towards the end of 2009 20
INSIGHT: The global financial crisis has had a negative impact on the emotional wellbeing of Dutch consumers with levels of stress up and personal happiness down 21
Stress levels have all been negatively impacted during the financial downturn 21
Work-life balance has also worsened in combination with the deepening downturn 23
The happiness levels of Dutch citizens have not been significantly dampened with the global economic crisis 25
Key takeouts and implications: recessionary consumers in the Netherlands have not been demonstrating a significant need for an emotional and physical 'pick-me-up' 27
INSIGHT: Dutch consumers have become increasingly price and value consciousness following the global economic downturn 28
Dutch consumers are becoming more value conscious amid the economic crisis and therefore looking to save money when buying groceries 28
Price and value consciousness heavily influences where Dutch consumers do their grocery shopping and how they shop but quality still matters too 30
Key takeouts and implications: value consciousness among Dutch consumers has intensified, albeit less so than elsewhere, and is reflected by how they determine where to shop 32
INSIGHT: Quality conscious and comparably confident Dutch shoppers are trying to remain loyal to brands despite the negative impact of the economic downturn 33
Dutch consumers are reluctant to give up some favorite brands as they make more 'considered' choices 33
Private labels are becoming more attractive to Dutch shoppers in the downturn 34
Key takeouts and implications: private label appeals to value conscious Dutch shoppers but they many remain broadly loyal to their favourite brands 38
INSIGHT: Dutch consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation 39
Dutch consumers are adopting various responses to cut back on food and beverage expenditures 39
Many Dutch shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents 44
Key takeouts and implications: a resurging desire to cook more often at home has occurred while private label and market leading brand competition in food and non-alcoholic beverages will intensify 47
INSIGHT: The significant majority of Dutch consumers' personal care regimes and related product choices have been 'recession resistant' 47
Over half of Dutch consumers are committed to looking their best in day-to-day life 48
Price and value conscious personal care/beauty shoppers in the Netherlands have not made notable changes to their personal care shopping and usage in order to save money 49
Dutch consumers are largely unaware or indifferent towards private label personal care products 52
Key takeouts and implications: Dutch consumers' health and beauty regimes are proving to be largely recession resistant 54
INSIGHT: Dutch consumers' alcohol consumption patterns and preferences have not changed significantly during the downturn 55
Dutch drinkers are careful about how much they spend on alcohol but do not perceive that they have been making significant cut backs in the amount they consume 56
Dutch drinkers appear to have become more value conscious in their at-home alcoholic beverage choices than their out-of-home choices 57
Private label alcohol is relatively prominent in the Netherlands but consumers still express uncertainty about comparative quality against branded equivalents 60
Dutch drinkers are more concerned about the quality credentials of alcoholic beverage brands and are less concerned about brand image 62
Key takeouts and implications: there has been little to no change for around eight in 10 Dutch drinkers, suggesting that alcohol preferences and habits in the country are largely 'recession resistant' 63
INSIGHT: Dutch consumers' household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn 63
Price-led value is still the most influential factor for Dutch shoppers' household and laundry care purchases but preferences do reflect other important influences 63
The private label household care market in the Netherlands is small but potentially lucrative given shoppers' desire for value 67
Key takeouts and implications: Dutch consumers associate hygiene and cleanliness with wellbeing and this makes them somewhat quality conscious 70
ACTION POINTS 71
ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition 71
Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans 71
Ensure that the value gains are instantaneous 72
Focus on quality to maintain differentiation and prove to consumers that quality really matters 73
Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions 74
Start planning for the longer-term by continually tracking Dutch consumers as an economic recovery begins to become a reality 74
APPENDIX 76
Methodology 76
Further reading and references 77
Ask the analyst 78
Datamonitor consulting 78
Disclaimer 78
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List of Tables
Table 1: Consumer survey: level of satisfaction with ""the general direction of how things are going"" and ""quality of life"", in the Netherlands (compared with the global average), 2009 10
Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in the Netherlands and globally, 2009 13
Table 3: Consumer survey: perceptions of whether broader economic conditions, household's financial situation, job security/confidence and housing market confidence had improved or worsened in the six month previous and how each might change in the proceeding six months, in the Netherlands, 2009 17
Table 4: Consumer survey: propensity to feel tense and the extent to which perceived levels of stress have changed in the last six months and are expected to change in the next six months, in the Netherlands, 2008-09 22
Table 5: Consumer survey: propensity to feel very tired and the extent to which perceived work-life balance has changed in the last six months and are expected to change in the next six months, in the Netherlands, 2008-09 24
Table 6: Consumer survey: happiness levels and the extent to which perceived happiness has changed in the last six months and are expected to change in the next six months, in the Netherlands, 2008-09 26
Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Dutch shoppers, 2009 30
Table 8: Consumer survey: changing efforts being made to use coupons, change grocery store choice to save money, embrace more disciplined shopping and gather and utilize store price information, among Dutch shoppers, April 2008-April 2009 32
Table 9: Consumer survey: the extent to which consumers are making effort to save money by adopting various food and drinks consumption and preparation approaches, in the Netherlands, 2008-09 43
Table 10: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market leading famous brands in food, soft drinks and hot drinks, in the Netherlands, 2009 46
Table 11: Total private label food penetration and spend ($ millions) in the Netherlands, 2002-2012 46
Table 12: Private label non-alcoholic beverage penetration and spend ($ millions in the Netherlands, 2002-2012 46
Table 13: Consumer survey: the importance attached to looking one's best in day-to-day life, the pressure to look good, and satisfaction with physical attractiveness/appearance, among Dutch consumers, 2008 and 2009 49
Table 14: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in the Netherlands, 2008-09 51
Table 15: Consumer survey: attempts made by Dutch consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09 52
Table 16: Private label personal care penetration and spend (US$ millions) in the Netherlands, 2002-2012 53
Table 17: Consumer survey: perception about private labels versus well known or market leading famous brands for grooming/beauty products in the Netherlands, 2009 53
Table 18: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in the Netherlands have cut down on the overall amount of alcohol bought/consumed in 2008-09 57
Table 19: Total private label alcoholic beverage penetration and spend (US$ millions) in the Netherlands, 2002-2012 60
Table 20: Consumer survey: the changing degree to which household and laundry care consumers in the Netherlands made product choices with value or cost in mind, 2008 65
Table 21: Consumer survey: attitudes towards doing housework in the Netherlands and globally, 2008 66
Table 22: Private label household care penetration and spend (US$m) in the Netherlands, 2002-2012 68
Table 23: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market-leading famous brands for household cleaning/laundry products, and how often such products are purchased to save money, in the Netherlands, 2009 70
List of Figures
Figure 1: Datamonitor's 'Recession and Recovery' portal will allow industry players to continually identify emerging opportunities and track what is happening in the Dutch economy as it develops 5
Figure 2: Over three-quarters of Dutch consumers believed the country was in recession in April 2009 6
Figure 3: The Dutch have been feeling the impact of the downturn less so than in other countries 7
Figure 4: In the midst of the global economic crisis, Dutch consumers remained comparatively bullish about their perceived purchasing power 8
Figure 5: Dutch consumers are inherently dissatisfied with how things are going in the country but remain largely satisfied with their overall quality of life 10
Figure 6: Dutch GDP and household consumption has recorded negative growth in the first half of 2009 12
Figure 7: In 2009, Dutch citizens have become somewhat ambivalent about their personal financial situation 13
Figure 8: Dutch negativity about the economy at large is greater than that shown towards their personal situation which reflects the comparatively high resilience of Dutch consumers 15
Figure 9: Only 20% of Dutch consumers expected economic conditions to improve by October 2009 16
Figure 10: Both Dutch consumer and industry confidence has shown signs of bottoming out in the second quarter of 2009 18
Figure 11: Dutch consumers are managing their finances more closely while nearly a third of individuals report difficulties in paying all the bills 19
Figure 12: Dutch consumers express ongoing reluctance about using credit to maintain their lifestyles and an increasing desire to save money 20
Figure 13: The economic downturn in the Netherlands has also been accompanied by additional levels of stress 23
Figure 14: Dutch consumers are prone to fatigue, but few perceived they had experienced a worsening work-life balance in the period October 2008 to April 2009 and few expected this scenario to worsen 25
Figure 15: Few Dutch citizens have become less happy as the financial crisis intensified in 20008-09 27
Figure 16: The overwhelming majority of Dutch consumers are more value conscious following the downturn 29
Figure 17: Quality of products sold has more influence than lower prices or habit over where people in the Netherlands so their shopping 31
Figure 18: Dutch consumers have not been particularly active in modifying their approach to shopping in order to save money 32
Figure 19: Even as the downturn has intensified, quality conscious Dutch consumers have tried to maintain brand preferences-more so than their global counterparts 34
Figure 20: Half of Dutch shoppers are routinely buying private label/store branded products in order to save money 36
Figure 21: Private label range plays a role in where people shop, not just in the Netherlands, but globally 37
Figure 22: Private label range is important in shaping the value-for-money considerations of Dutch shoppers 37
Figure 23: The private label market is impacted by a broad range of drivers and inhibitors 38
Figure 24: Dutch consumers became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise 40
Figure 25: The attributes deemed most influential in what food and beverages Dutch consumers buy reiterate the influence of quality and price in their general decisions 41
Figure 26: Dutch consumers are both quality and price focused in their food shopping orientations 41
Figure 27: Dutch consumers are adopting various responses to cut back on food and beverage expenditure, but none of them to a significant degree 43
Figure 28: There has been little change in the self-reported propensity for Dutch consumers to cook an evening meal at home from scratch 44
Figure 29: There has been little change in the self-reported propensity for Dutch consumers to have a takeaway meal at home 44
Figure 30: Dutch consumers are split on their opinions about how famous branded food products, soft drinks and hot drinks compare to private label equivalents 45
Figure 31: Dutch consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices 48
Figure 32: Dutch personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality 50
Figure 33: Personal care/beauty shoppers in the Netherlands and elsewhere are highly price conscious 50
Figure 34: Nearly two-thirds of Dutch consumers consider private label beauty products to be good alternatives to well known or market leading brands 54
Figure 35: Dutch consumers are careful about how much they spend on alcohol but do not perceive that they have been making significant cut bucks in the amount they consume 56
Figure 36: Value consciousness among Dutch drinkers has had more impact on at-home alcoholic drinks' consumption in 2008-09, albeit not to a significant extent 58
Figure 37: Dutch drinkers, perhaps influenced by a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages 59
Figure 38: Nearly one-quarter of Dutch drinkers are highly influenced by alcohol beverage promotional offers 59
Figure 39: Over one-third of Dutch drinkers believe that private label alcoholic drinks are good alternatives to market-leading or famous brands 61
Figure 40: Dutch drinkers are most likely to be skeptical of private label beer compared to wine or spirits 61
Figure 41: Although Dutch drinkers are price conscious, brand name is increasingly shaping preferences 62
Figure 42: Price-led value is still the most influential factor for Dutch consumers' household and laundry care purchases 64
Figure 43: In 2008, Dutch household and laundry care choices were made with greater consideration for cost/value but consumers showed an ongoing desire for efficacy-led quality 65
Figure 44: Dutch consumers value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks 66
Figure 45: Two-thirds of Dutch consumers are 'frequent' purchasers of household care products on the basis of value-for-money 67
Figure 46: Four-in-ten Dutch consumers regularly purchase private label household care products to save money 68
Figure 47: A small proportion of Dutch consumers consider private label household and laundry products to be superior to branded equivalents 69
Figure 48: Coles' 'Feed Your Family for Under $10' campaign is similar to an approach adopted by Sainsbury's in the UK 72
Figure 49: Manufacturers and retailers looking to deliver value-for-money must in the provision of factors associated with the PPI, but while also offering consumers lower than expected prices 73
Figure 50: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term 75
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