The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors in Australia

Published by: Datamonitor

Published: Jun. 1, 2009 - 264 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

THE FUTURE DECODED

INTRODUCTION: Understanding how 'recessionary mindsets' influence Australians' attitudes towards and actual consumption is vital

The 'recessionary mindset' of Australian consumers is reflected by the widespread belief that they're in a recession

The economic downturn has had an impact on the lifestyles of more than half of Australian consumers

Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on Australians' lifestyles

TREND: Low consumer confidence is reflected by a generally negative outlook among Australian consumers

Australians are generally content with their quality of life despite being divided about the country's overall direction

Key takeouts and implications: Australians' mood towards the direction of the country has dampened slightly but they remain relatively upbeat of their quality of life

TREND: Australian consumers have lost confidence in their financial security and are being more scrupulous in response

Satisfaction with one's financial situation is low among Australian consumers

Perceptions about the economy, job security, financial status and the housing market in Australia have all worsened and there is only limited optimism for the six months ahead

Australians are managing their finances more closely with some even struggling to pay the bills

Australians are making greater efforts to save and still aspire to be less reluctant on credit

Key takeouts and implications: Australians have lost satisfaction in their financial situation and there is only mild optimism of any improvement coming towards the end of 2009

INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Australians with levels of stress up and personal happiness down

Stress levels have all been negatively impacted during the financial downturn

Work-life balance has also worsened in combination with the deepening downturn

The happiness levels Australian citizens have declined in line with the global economic crisis

Key takeouts and implications: Australians have lost satisfaction in their financial situation and there is only mild optimism of any improvement coming towards the end of 2009

INSIGHT: Australian consumers have become increasingly price and value conscious following the global economic downturn

Australian consumers are becoming more value conscious and therefore looking to save money when buying groceries

Price and value consciousness heavily influences where Australian consumers do their grocery shopping and how they shop but quality still matters too

Key takeouts and implications: the general value consciousness of Australians' has intensified and is reflected by how they determine where to shop

INSIGHT: Brand loyalties are under increasing threat as Australian shoppers give up brands and increasingly embrace private label

Australian consumers are beginning to give up some of their favorite brands as they make more 'considered' choices

Private labels are becoming more attractive to Australian shoppers in the downturn

Key takeouts and implications: the general value consciousness of Australians', combined with their current reflective consumption patterns will create an optimal platform for private label growth

INSIGHT: Australian consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation

Australian consumers are adopting various responses to cut back on food and beverage expenditures, particularly preparing more meals at home

Many Australian shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents

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

INSIGHT: The significant majority of Australians' personal care regimes and related product choices have been 'recession resistant'

Almost half of Australian consumers are committed to looking their best in day-to-day life

Price and value conscious personal care/beauty shoppers in Australia have not made notable changes to their personal care shopping and usage in order to save money

Australians are largely unaware or indifferent towards private label personal care products

Key takeouts and implications: Australians' health and beauty regimes are proving to be largely recession resistant

INSIGHT: Australians' alcohol consumption patterns and preferences have not changed significantly during the downturn

Australian 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

Australian drinkers appear to have become more value conscious in their at-home alcoholic beverage choices than their out-of-home choices

Private label alcohol is not as prevalent in Australia as in other countries which results in uncertainty about comparative quality against branded equivalents

Australian drinkers are more concerned about the quality credentials of alcoholic beverage brands and are less concerned about brand image

Key takeouts and implications: there has been little to no change for around seven in ten Australian drinkers suggesting that alcohol is largely 'recession resistant'

INSIGHT: Australians' household care buying preferences are heavily shaped by price consciousness irrespective of an economic downturn

Price led value is still the most influential factor for Australians' household and laundry care purchases but preferences do reflect other important influences

The private label household care market in Australia is small but potentially lucrative given shoppers' desire for value

Key takeouts and implications: Australians' associate hygiene and cleanliness with wellbeing and this, combined with their inherent dislike of household chores, makes them somewhat quality conscious

ACTION POINTS

ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition

Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans

Ensure that the value gains are instantaneous

Focus on quality to maintain differentiation and prove to consumers that quality really matters

Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions

APPENDIX

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Consumer survey: level of satisfaction with the general direction of how things are going and quality of life, in Australia (compared with the global average), 2009

Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in Australia (compared with the global average), 2009

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 Australia, 2009

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 Australia, 2008-09

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 Australia

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 Australia, 2008-09

Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Australian shoppers, 2009

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 Australian shoppers, April 2008-April 2009

Table 9: Consumer survey: the relative cost/value and quality consciousness of Australians and global consumers overall when purchasing food and beverage products in 2008

Table 10: Consumer survey: the extent to which Australian consumers are making effort to save money by adopting various food and drinks consumption and preparation approaches, 2008-09

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 Australia, 2009

Table 12: Private label food penetration and spend ($ millions) in Australia, 2002-2012

Table 13: Private label non-alcoholic beverage penetration and spend ($ millions) in Australia, 2002-2012

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 Australian consumers, 2008 and 2009

Table 15: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in Australia, 2008-09

Table 16: Consumer survey: attempts made by Australians to change their personal care/beauty habits in order to save money, by product category, 2008-09

Table 17: Private label personal care penetration and spend ($ millions) in Australia, 2002-2012

Table 18: 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 Australia, 2009

Table 19: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in Australia have cut down on the overall amount of alcohol bought/consumed in 2008-09

Table 20: Total private label alcoholic beverage penetration and spend ($ millions) in Australia, 2002-2012

Table 21: Consumer survey: the changing degree to which household and laundry care consumers in Australia made product choices with value or cost in mind, 2008

Table 22: Consumer survey: Australian attitudes towards doing housework, 2008

Table 23: Private label household care penetration and spend ($m) in Australia, 2002-2012

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 Australia, 2009

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 Australian economy as it develops

Figure 2: More than two-thirds of Australian consumers believe the country is in recession but a relatively small proportion of these 'strongly agree'

Figure 3: One-in-four Australian consumers feels that their lifestyle has not changed in light of the downturn

Figure 4: Australian consumers are divided about the direction their country is taking but this has not significantly impacted their perceptions on quality of life

Figure 5: More than one-third of Australian consumers are currently dissatisfied with their financial situation

Figure 6: Australians' negativity about the economy at large is greater than that shown towards their personal situation

Figure 7: Only 19% of Australians expect economic conditions to improve in the period April 2009 through to October 2009 and 15% think the same about the housing market

Figure 8: Australian consumers are managing their finances more closely while a quarter of individuals report difficulties in paying all the bills

Figure 9: Australians are generally reluctant to sustain their reliance on credit and express an increasing desire to save money

Figure 10: One in five Australians use their credit card to pay for groceries and to eat out

Figure 11: The economic downturn has also been accompanied by additional stress levels among Australians

Figure 12: Australians are prone to fatigue while almost one-quarter has experienced a worsening work-life balance in the period October 2008 to April 2009

Figure 13: Nearly one in four Australian citizens has become less happy during the period October 2008 to April 2009

Figure 14: The overwhelming majority of Australian consumers are more value conscious following the downturn

Figure 15: Quality of products sold has more influence than lower prices or habit over where people in Australia do their shopping

Figure 16: Price and value consciousness is influencing where Australian consumers do their grocery shopping and how they shop

Figure 17: As the downturn has intensified, so too has the extent to which consumers have been forced to sacrifice some of their favorite brands

Figure 18: Private label range plays a role in where people shop, not just in Australia, but globally

Figure 19: Almost a third of Australian shoppers are routinely buying private label/store branded products in an effort to save money

Figure 20: Consumers are increasingly able to research prices independently, facilitated by new initiatives in pricing transparency such as that offered by GROCERYchoice in Australia

Figure 21: The private label market is impacted by a broad range of drivers and inhibitors

Figure 22: Australians became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise

Figure 23: The attributes deemed most influential in what food and beverages Australians buy also highlight the price consciousness shaping the choices they make

Figure 24: Australian consumers are adopting various responses to cut back on food and beverage expenditures

Figure 25: There has been little change in the actual self-reported propensity for Australian consumers to cook an evening meal at home from scratch in 2008-09

Figure 26: There has been little change in the propensity for Australians to have a takeaway meal at home in 2008-09

Figure 27: Australian consumers are divided on their opinions about how famous branded food products, soft drinks and hot drinks compare to private label equivalents

Figure 28: Australian consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices

Figure 29: Australian personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality

Figure 30: Personal care/beauty shoppers in Australia and elsewhere are highly price conscious

Figure 31: Nearly one-third of Australian consumers consider private label beauty products to be good alternatives to well known or market leading brands

Figure 32: Australian 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

Figure 33: Value consciousness among Australian drinkers has had more impact on at-home alcoholic drinks' consumption in 2008-09

Figure 34: Australian drinkers, perhaps influenced by a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages

Figure 35: More than one-third of Australian drinkers are highly influenced by alcohol beverage promotional offers

Figure 36: Only 15% of Australian drinkers believe that private label alcoholic drinks are good alternatives to market leading or famous brands

Figure 37: Australians are largely unfamiliar with or inexperienced drinkers of private label alcohol beverages

Figure 38: Although Australian drinkers are price conscious, brand name also heavily shapes preferences

Figure 39: Price led value is still the most influential factor for Australians' household and laundry care purchases

Figure 40: In 2008, Australian household and laundry care choices were made with greater consideration for cost/ value but consumers showed an ongoing desire for efficacy led quality

Figure 41: Australians value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks

Figure 42: More than two-thirds of Australians are 'frequent' purchasers of household care products on the basis of value-for-money

Figure 43: Just over one in five Australians regularly purchases private label household care products to save money

Figure 44: A small proportion of Australians consider private label household and laundry products to be superior to branded equivalents

Figure 45: Coles' 'Feed Your Family for Under $10' campaign is similar to an approach adopted by Sainbury's in the UK

Figure 46: 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

Abstract

• Detailed analysis documenting Australian consumers' 'recessionary mindset' and how it influences perceptions about current and future prospects
• Insights highlighting how the economic downturn has affected Australians' perceived quality of life, emotional wellbeing and financial security
• In-depth analysis of Australians' changing price sensitivity, value consciousness and attitudes towards private label across four major FMCG sectors
• Countries and categories covered: Australia; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

• 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

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