The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors in the United States

Introduction

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.

Scope

*Detailed analysis documenting US 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 US

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

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

Highlights

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

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 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

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
[Studien Infos ausblenden]

Table of Contents 2
Table of figures 3
Table of tables 4
THE FUTURE DECODED 5
INTRODUCTION: Understanding how 'recessionary mindsets' influence attitudes towards and actual consumption is vital 5
The 'recessionary mindset' of US consumers is reflected by the widespread belief that they're in a recession 5
The economic downturn has had an impact on the lifestyles of more than half of US consumers 6
Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on Americans' lifestyles 7
TREND: A somewhat paradoxical situation exists whereby US consumers are frustrated about the direction of the country but more positive about their quality of life 8
US citizens are generally downbeat about how things are going but this does not appear to be overly impacting negative perceptions about their quality of life 8
Key takeouts and implications: Americans' mood towards the direction of the country has dampened throughout the last decade but they remain relatively upbeat of their quality of life 11
TREND: US consumers have lost confidence in their financial security and the wider US economy and there is only moderate optimism for the rest of 2009 12
Satisfaction with one's financial situation is low among US consumers 12
Perceptions about the economy, job security, financial status and the housing market in the US have all worsened and there is only limited optimism for the six months ahead 14
US consumers are managing their finances more closely with some even struggling to pay the bills 21
US consumers are making greater efforts to save while negative attitudes towards credit prevail 22
Key takeouts and implications: Americans have lost satisfaction in their financial situation and there is only mild optimism of any improvement coming towards the end of 2009 24
INSIGHT: The global financial crisis has had a negative impact on the emotional wellbeing of US consumers with levels of stress up and personal happiness down 25
Stress levels have all been negatively impacted during the financial downturn 25
Work-life balance has also worsened in combination with the deepening downturn 28
The happiness levels of US citizens have declined in line with the global economic crisis 30
Key takeouts and implications: recessionary consumers in the US are in greater need of emotional and physical 'pick-me-ups' 32
INSIGHT: US consumers have become increasingly price and value consciousness following the global economic downturn 33
US consumers are becoming more value conscious and are therefore looking to save money when buying groceries 33
Price and value consciousness heavily influences where US consumers do their grocery shopping and how they shop, but quality still matters too 36
Key takeouts and implications: the general value consciousness of Americans' has intensified and is reflected by how they determine where to shop 40
INSIGHT: Brand loyalties are under increasing threat as US shoppers give up brands and increasingly embrace private label 41
US consumers are beginning to give up some of their favourite brands as they make more 'considered' choices 42
Private labels are becoming more attractive to US shoppers in the downturn 44
Key takeouts and implications: the general value consciousness of Americans, combined with their current reflective consumption patterns, will create an optimal platform for continued private label growth 50
INSIGHT: US consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation 51
US consumers are adopting various responses to cut back on food and beverage expenditures 52
Many US shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents 58
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 60
INSIGHT: US consumers have not been making significant changes to their personal care regimes or product choices 61
More than half of US consumers are committed to looking their best in day-to-day life 62
Price and value conscious personal care/beauty shoppers in the US have made some changes to their personal care shopping and usage in order to save money 63
Private label and personal care/beauty products have a relatively high degree of credibility among US consumers 66
Key takeouts and implications: Americans' beauty regimes are changing, but not in a wholesale manner 68
INSIGHT: Alcoholic drinks' consumption patterns and preferences in the US have not changed significantly during the downturn 69
US 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 70
US drinkers appear to have become more value conscious in their at-home alcoholic beverage choices 71
Private label alcohol is more developed in the US and therefore more accepted as an alternative among US drinkers 74
Key takeouts and implications: there has been little to no change for around seven in 10 UK drinkers, suggesting that alcohol is largely 'recession resistant' 77
INSIGHT: American's household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn 78
Price led value is still the most influential factor for Americans' household and laundry care purchases but preferences do reflect other important influences 78
The private label household care market in America is small but potentially lucrative given shoppers' desire for value 82
Key takeouts and implications: Americans' associate hygiene and cleanliness with wellbeing and this, combined with their inherent dislike of household chores, makes them somewhat quality conscious 85
ACTION POINTS 86
ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition 86
Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans 86
Focus on quality to maintain differentiation and prove to consumers that quality really matters 88
Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions 89
Start planning for the longer-term 90
APPENDIX 91
Methodology 91
Further reading and references 92
Ask the analyst 93
Datamonitor consulting 94
Disclaimer 94
[Inhaltsverzeichnis ausblenden]

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 US (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 US 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 US, 2009 19
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 US 26
Table 5: Consumer survey: contributing factors to stress among Americans, by gender, 2008 28
Table 6: 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 US 29
Table 7: 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 US 31
Table 8: Consumer survey: changing value-consciousness and desire to save money when buying groceries among US shoppers, 2009 36
Table 9: 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 US shoppers, April 2008-April 2009 39
Table 10: Consumer survey: the relative cost/value and quality consciousness of US and global consumers overall when purchasing food and beverage products in 2008 53
Table 11: 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 US, 2008-09 56
Table 12: 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 US, 2009 59
Table 13: Total private label food penetration and spend ($ millions) in the US, 2002-2012 60
Table 14: Total private label non-alcoholic beverages penetration and spend (US$ millions) in Europe and the US, by country, 2002-2012 60
Table 15: 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 US consumers, 2008 and 2009 62
Table 16: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in the US, 2008-09 65
Table 17: Consumer survey: attempts made by US consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09 66
Table 18: Total private label personal care penetration and spend ($ millions) in Europe and the US, by country, 2002-2012 67
Table 19: Consumer survey: perception about the relative superiority or inferiority of private labels versus 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 the US, 2009 67
Table 20: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in the US have cut down on the overall amount of alcohol bought/consumed in 2008-09 70
Table 21: Total private label alcoholic beverage penetration and spend ($ millions) in the US, 2002-2012 74
Table 22: Consumer survey: the changing degree to which household and laundry care consumers in the UK made product choices with value or cost in mind, 2008 80
Table 23: Consumer survey: Americans attitudes towards doing housework, 2008 81
Table 24: Total private label household care penetration and spend ($m) in Europe and the US, by country, 2002-2012 83
Table 25: 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 America, 2009 85
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 US economy as it develops 5
Figure 2: As of April 2009, nearly half of US consumers 'strongly' believed the country is in recession which is indicative of a deeper 'recessionary mindset' among them compared to elsewhere 6
Figure 3: Only one-in-five US consumers feels that their lifestyle has not changes in light of the downturn 7
Figure 4: From a personal perspective, the overwhelming majority of US individuals generally look upon 2008 negatively 9
Figure 5: US consumers are inherently dissatisfied with how things are going in the country, but hold more positive sentiment about their quality of life 10
Figure 6: Americans' sense of disillusionment with the direction of the country has been getting progressively worse over the last decade 11
Figure 7: Nearly half of US consumers are currently dissatisfied with their financial situation 13
Figure 8: Negativity about the economy at large is greater than that shown towards their personal situation 16
Figure 9: Only 12% of US consumers expected economic conditions to improve in the period April 2009 through to October 2009 and 13% think the same about the housing market 18
Figure 10: The majority of US consumers do not anticipate economic growth returning until at least the end of 2009 20
Figure 11: More than two-thirds of Americans perceive the job market to be 'bad' in their region of the country 20
Figure 12: There has not been a significant upturn in consumer sentiment about their household's financial situation in 2009 21
Figure 13: Given the economic downturn, the overwhelming majority of US consumers are managing their finances more closely while over a third of individuals report difficulties in paying all the bills 22
Figure 14: A spike in personal savings has occurred in 2008-09 reflecting the financial prudence of Americans 23
Figure 15: US consumers express reluctance about using credit to maintain their lifestyles and an increasing desire to save money 23
Figure 16: The economic downturn has also been accompanied by additional levels of stress in the US 27
Figure 17: US consumers are prone to fatigue while more than one in five has experienced a worsening work-life balance in the period October 2008 to April 2009 30
Figure 18: More than a quarter of US citizens became less happy during the period October 2008 to April 2009 32
Figure 19: The overwhelming majority of US consumers are more value conscious following the downturn 35
Figure 20: Quality of products sold and the attraction of lower prices have equal influence in dictating where people in the US do their shopping, which is indicative of a 'want-it-all' value-for-money shopper mentality 37
Figure 21: There has been a large increase in coupon usage among Americans over the course of 2008-09 40
Figure 22: As the downturn has intensified, so to has the extent to which consumers have been forced to sacrifice some of their favorite brands 42
Figure 23: US consumers' brand loyalty to packaged goods' brands has been compromised in the last two years 43
Figure 24: Approaching half of US shoppers are routinely buying private label/store branded products in order to save money 47
Figure 25: Private label range plays a role in where people shop, not just in the US, but globally 48
Figure 26: Supervalu's emphasis on a multi-tiered approach provides consumers with a strong point of differentiation 49
Figure 27: The private label market is impacted by a broad range of drivers and inhibitors 50
Figure 28: US consumers became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise 53
Figure 29: The attributes deemed most influential in what food and beverages US consumers buy also highlight the price consciousness shaping the choices they make 54
Figure 30: US consumers are adopting various responses to cut back on food and beverage expenditures 56
Figure 31: There has been little change in the propensity for US consumers to cook an evening meal at home from scratch 57
Figure 32: There has been little change in the propensity for US consumers to have a takeaway meal at home 57
Figure 33: US consumers are divided on their opinions about how famous branded food products, soft drinks and hot drinks compare to private label equivalents 59
Figure 34: US consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices 63
Figure 35: US personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality 64
Figure 36: Personal care/beauty shoppers in the US are highly price conscious 64
Figure 37: Around half of US consumers consider private label beauty products to be good alternatives to well known or market leading brands 68
Figure 38: US consumers are careful about alcohol spend, more so than the global average, but do not perceive that they have been making significant cut backs in the amount they consume 71
Figure 39: Value consciousness among US drinkers has had similar impact on both on-and off-trade alcoholic drinks' consumption in 2008-09 72
Figure 40: US drinkers, perhaps influenced a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages 73
Figure 41: US drinkers, having become more accustomed to in-store alcoholic beverage promotions, are more heavily influenced promotional offers than consumers from other countries 74
Figure 42: Over a third of US drinkers believe that private label alcoholic drinks are good alternatives to market leading or famous brands 75
Figure 43: Private label alcoholic drinks have the least credibility among US consumers in the beer category 76
Figure 44: Although US drinkers are price conscious, brand name also heavily shapes preferences 77
Figure 45: Price led value is still the most influential factor for US consumers' household and laundry care purchases in 2009 79
Figure 46: In 2008, US household and laundry care choices were made with greater consideration for cost/ value but consumers showed an ongoing desire for efficacy led quality 80
Figure 47: Americans value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks 81
Figure 48: Nearly two-thirds of Americans are 'frequent' purchasers of household care products on the basis of value-for-money 82
Figure 49: Nearly one-third of Americans regularly purchases private label household care products to save money 83
Figure 50: A small proportion of Americans consider private label household and laundry products to be superior to branded equivalents 84
Figure 51: 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 88
Figure 52: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term 90
[Tabellenverzeichnis ausblenden]