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

Introduction

90% of Swedish 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 Swedish consumers experienced falling job security and diminishing confidence in the housing market in 2008-09.

Scope

*Detailed analysis documenting Swedish 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 Sweden

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

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

Highlights

On-third of Swedish 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. Nevertheless, they remain comparatively content and confident in their purchasing power

One-third of Swedish shoppers are also '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, although this mentality does differ depending on product category

For three-fifths of Swedish shoppers, lower prices have a high amount of influence over where people do their grocery shopping. Nevertheless, the quality of products sold has more influence over their (changeable) grocery shopping destinations. This is symptomatic of the steadfast focus on quality among Swedish shoppers in most FMCG purchases

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 Swedish 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
Highlights

On-third of Swedish 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. Nevertheless, they remain comparatively content and confident in their purchasing power

One-third of Swedish shoppers are also '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, although this mentality does differ depending on product category

For three-fifths of Swedish shoppers, lower prices have a high amount of influence over where people do their grocery shopping. Nevertheless, the quality of products sold has more influence over their (changeable) grocery shopping destinations. This is symptomatic of the steadfast focus on quality among Swedish shoppers in most FMCG purchases
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Table of Contents 2
Table of figures 3
Table of tables 4
THE FUTURE DECODED 5
INTRODUCTION: Understanding how 'recessionary mindsets' influence Swedish consumers' attitudes and actual consumption is vital 5
The 'recessionary mindset' of Swedish consumers has intensified with the widespread belief that they're living in a recession 6
The economic downturn has had an impact on the lifestyles of around one-third of Swedish consumers, but a growing number appear to be 'resistant' to the recession 7
Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on the lifestyles of Swedish consumers 8
TREND: Swedish citizens remain appreciative of their quality if life even if they are conscious of a worsening economic situation 8
Swedish citizens are somewhat negative about the direction of society, but are more appreciative of their quality of life 8
Key takeouts and implications: the mood towards the direction of Sweden has further dampened as the economic downturn has deepened, but more than half remain satisfied with their quality of life 10
TREND: Swedish consumers have lost confidence in their financial security and are being more scrupulous in response 11
Satisfaction with one's financial situation in Sweden has clearly been tempered by the worsening economic situation 11
In 2008-09 perceptions about the economy, job security, financial status and the housing market in Sweden all worsened, although there is tempered optimism looking ahead to the latter part of 2009 13
Swedish consumers are managing their finances more closely with some even struggling to pay the bills 18
Swedish consumers are aspiring to be less reluctant on credit while maintaining their efforts to save 19
Key takeouts and implications: Swedish consumers are losing satisfaction with their financial situation and there is only mild optimism of an improvement coming towards the end of 2009 20
INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Swedish consumers with levels of stress up and personal happiness down 21
Stress levels have all been negatively impacted during the financial downturn but tension levels are below global counterparts 21
Work-life balance in Sweden has worsened in combination with the deepening downturn 23
The happiness levels of Swedish citizens have declined in line with the global economic crisis 25
Key takeouts and implications: recessionary consumers in Sweden are in greater need of emotional and physical 'pick-me-ups' 27
INSIGHT: Swedish consumers have become increasingly price and value consciousness following the global economic downturn 28
Swedish consumers are less value conscious than elsewhere but are looking to save money when buying groceries 28
Price and value consciousness heavily influences where Swedish consumers do their grocery shopping and how they shop but quality is the overriding factor 31
Key takeouts and implications: value consciousness among Swedish consumers has intensified, albeit less so than elsewhere, and is reflected by how they determine where to shop 34
INSIGHT: Quality conscious Swedish shoppers are trying to remain loyal to brands despite the negative impact of the economic downturn 35
Swedish consumers are reluctant to give up some favorite brands as they make more 'considered' choices 35
Private labels are becoming more attractive to Swedish shoppers in the downturn 37
Key takeouts and implications: private label is beginning to appeal to Swedish shoppers but many remain loyal to their favourite national brands 41
INSIGHT: Swedish consumers are gradually embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation 41
Swedish consumers are slower than global counterparts in adopting various responses to cut back on food and beverage expenditures 41
Swedish shoppers are more familiar with private label food product than non-alcoholic beverages and this is somewhat reflected by penetration rates 47
Key takeouts and implications: a desire to cook more often at home has occurred while private labellers can capitalize on the uncertainties about the perceived superiority of national branded product equivalents 49
INSIGHT: Swedish consumers have not been making significant changes to their personal care regimes or product choices 50
Around half of Swedish consumers are committed to looking their best in day-to-day life 50
Personal care/beauty shoppers in Sweden have not made notable changes to their shopping and usage in order to save money 52
Private label and personal care/beauty products have credibility among Swedish consumers 55
Key takeouts and implications: Swedish consumers' health and beauty regimes are proving to be largely recession resistant 57
INSIGHT: Alcoholic drinks' consumption patterns and preferences in Sweden have not changed significantly during the downturn 58
Swedish consumers 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 58
Swedish drinkers show little change in their alcoholic drinks consumption either at home or when out in pubs, bars and restaurants 60
Private label alcohol is not well developed in Sweden with many consumers having little experience or views on such products as viable alternatives to famous brand equivalents 63
Key takeouts and implications: there has been little to no change in the self-reported drinking habits of Swedish drinkers suggesting that alcohol is largely 'recession resistant' 66
INSIGHT: Swedish consumers' household care buying preferences are increasingly shaped by price consciousness irrespective of an economic downturn 67
Price led value has established itself as the most influential factor for Swedish household and laundry care purchases, but preferences do reflect other important influences 67
The private label household care market in Sweden is small but potentially lucrative given shoppers' desire for price-led value 70
Key takeouts and implications: Swedish consumers associate hygiene and cleanliness with wellbeing and this, combined with their dislike of household chores, makes them somewhat quality conscious, but price consciousness has increased amid the economic downturn 73
ACTION POINTS 74
ACTION: Prepare an approach to delivering and communicating better value-for-money than the competition without alienating those still searching for quality 74
Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans 74
Understand consumer loyalty levels for your category 75
Adopt astute 'mix management' marketing 76
Ensure that the value gains for shoppers are instantaneous 76
Focus on quality to maintain differentiation and prove to consumers that quality really matters 77
Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions 78
Start planning for the longer-term by continually tracking Swedish consumers as an economic recovery begins to become a reality 78
APPENDIX 80
Methodology 80
Further reading and references 81
Ask the analyst 82
Datamonitor consulting 82
Disclaimer 82
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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 Sweden and globally, 2009 10
Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in Sweden and globally, 2009 12
Table 3: Consumer survey: perceptions of whether broader economic conditions, 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 Sweden, 2009 18
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 Sweden, 2008-09 23
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 Sweden, 2008-09 25
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 Sweden, 2008-09 26
Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Swedish 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 Swedish shoppers, April 2008-April 2009 34
Table 9: Consumer survey: the relative cost/value and quality consciousness of Swedish and global consumers overall when purchasing food and beverage products in 2008 43
Table 10: Consumer survey: the extent to which consumers are making effort to save money by adopting various food and drinks consumption and preparation approaches, in Sweden, 2008-09 46
Table 11: 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 Sweden, 2009 48
Table 12: Private label food penetration and spend ($ millions) in Sweden, 2002-2012 49
Table 13: Private label non-alcoholic beverage penetration and spend ($ millions) in Sweden, 2002-2012 49
Table 14: 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 Swedish consumers, 2008 and 2009 52
Table 15: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in Sweden, 2008-09 54
Table 16: Consumer survey: attempts made by Swedish consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09 55
Table 17: Total private label personal care penetration and spend ($ millions) in Sweden, 2002-2012 56
Table 18: Consumer survey: perception about the relative superiority or inferiority of private labels vs. well known or market leading famous brands for grooming/ beauty products, and agreement that such products are good alternatives to well known or market leading famous brands, in Sweden, 2009 57
Table 19: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in Sweden have cut down on the overall amount of alcohol bought/consumed in 2008-09 60
Table 20: Total private label alcoholic beverage penetration and spend ($ millions) in Sweden, 2002-2012 64
Table 21: Consumer survey: the changing degree to which household and laundry care consumers in Sweden made product choices with value or cost in mind, 2008 68
Table 22: Consumer survey: attitudes towards doing housework in Sweden and globally, 2008 69
Table 23: Private label household care penetration and spend ($ millions) in Sweden, 2002-2012 71
Table 24: 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 Sweden, 2009 72
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 as it develops 5
Figure 2: Nine in ten Swedish consumers believe their country is in recession 6
Figure 3: One in three consumers' feel that their lifestyle has not changed in light of the downturn 7
Figure 4: Swedish consumers are inherently dissatisfied with how things are going in their country but remain largely satisfied with their overall quality of life 9
Figure 5: Two in five Swedish consumers are dissatisfied with their current financial situation 12
Figure 6: Negativity about the economy at large is greater than that shown towards their personal situation 15
Figure 7: One in four Swedish consumers expect economic conditions to improve in the period April 2009 to October 2009. 17
Figure 8: Swedish consumers are managing their finances more closely while a quarter of individuals report difficulties in paying all the bills 19
Figure 9: Swedes are generally reluctant to sustain a reliance on credit 20
Figure 10: The economic downturn has also been accompanied by additional levels of stress in Sweden 22
Figure 11: Swedish consumers are prone to fatigue while one in four has experienced a worsening work-life balance in the period October 2008 to April 2009. 24
Figure 12: One in five Swedes have become less happy during the period October 2008 to April 2009. 27
Figure 13: One in three Swedes are more value conscious following the downturn, but this is not as pronounced as their global counterparts 29
Figure 14: In the midst of the global economic crisis, Swedish consumers remained bullish about their perceived purchasing power 31
Figure 15: Quality of products has more influence than lower prices and promotional offers in terms of where Swedes do most of their grocery shopping 32
Figure 16: Price and value consciousness is influencing where Swedish consumers do their grocery shopping and how they shop 33
Figure 17: Even as the downturn has intensified, quality conscious Swedish consumers have tried to maintain brand preferences-more so than their global counterparts 36
Figure 18: Swedish consumers are staying comparably loyal to their favored grocery brands although switching has intensified in 2008-09 37
Figure 19: One in five Swedish shoppers routinely buy private label products in order to save money 39
Figure 20: Compared to the global average, private label range in less influential in where Swedes shop 39
Figure 21: The private label market is impacted by a broad range of drivers and inhibitors 40
Figure 22: Swedish consumers became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise. 42
Figure 23: The attributes deemed most influential in what food and beverages Swedish consumers buy reiterate the influence of quality/freshness and price in their decision 43
Figure 24: Swedish consumers are generally more quality than price focused in their food shopping orientations 44
Figure 25: Swedish consumers are adopting various responses to cut back on food and beverage expenditure 45
Figure 26: Less than one in ten Swedes now cook an evening meal from scratch never/less than once a week 46
Figure 27: There has been little change in the propensity for Swedish consumers to have a takeaway at home 47
Figure 28: Swedish consumers' experience/knowledge of private label products is more limited in the non alcoholic drinks category 48
Figure 29: Swedish consumers are appearance conscious and this makes them less willing to trade down when making personal choices. 51
Figure 30: Swedish personal care/beauty shoppers show little desire to sacrifice on quality 53
Figure 31: Compared to a typical global consumers, Swedish personal care/beauty consumers are heavily are not influenced by brand loyalties 54
Figure 32: Opinion is divided on whether private label beauty products are good alternatives to well known or market leading brands 56
Figure 33: Swedish consumers are careful about how much they spend on alcohol, but do not perceive that they have been making significant cutbacks in the amount they consume. 59
Figure 34: Swedish consumers show little change in their self-reported drinking habits either at home or when out in pubs, bars and restaurants 61
Figure 35: Swedish drinkers are reluctant to opt for cheaper brands and formats of alcoholic beverages. 62
Figure 36: Swedish drinkers appear less influenced by promotional offers than their global counterparts 63
Figure 37: The majority of Swedes have little knowledge/experience of private label alcoholic drinks and therefore cannot offer qualified opinion on the merits of private label brands 64
Figure 38: Only a small proportion of Swedish drinkers believe that private label alcoholic drinks are a good alternative to market leading brands 65
Figure 39: Habit/preferred brand plays a strong role in alcoholic beverage choice for Swedish drinkers 66
Figure 40: Price has become the biggest influence on Swedish consumers choice of household and laundry care products 67
Figure 41: The purchasing orientations of Swedish household care shoppers in 2008 showed little change 68
Figure 42: Swedish consumers value cleanliness but most dislike doing housework and want to minimize the time taken to complete such tasks 69
Figure 43: Over half of Swedish consumers are 'frequent' purchasers of household care products on the basis of value for money 70
Figure 44: Nearly one quarter of Swedish shoppers regularly purchase private household care products to save money 71
Figure 45: The majority perceive little difference between private label household and laundry products and branded equivalents. 72
Figure 46: The Feed Your Family For a Fiver campaign reflects a shift in communication tact for the number three retailer Sainsbury's 75
Figure 47: 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 77
Figure 48: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term 79
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