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

Published by: Datamonitor

Published: Jul. 6, 2009 - 98 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 attitudes towards and actual consumption is vital

The 'recessionary mindset' of US 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 US consumers

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

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

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

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

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

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

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

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

US consumers are making greater efforts to save while negative attitudes towards credit prevail

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

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

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 of US citizens have declined in line with the global economic crisis

Key takeouts and implications: recessionary consumers in the US are in greater need of emotional and physical 'pick-me-ups'

INSIGHT: US consumers have become increasingly price and value consciousness following the global economic downturn

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

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

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

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

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

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

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

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

US consumers are adopting various responses to cut back on food and beverage expenditures

Many US 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: US consumers have not been making significant changes to their personal care regimes or product choices

More than half of US consumers are committed to looking their best in day-to-day life

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

Private label and personal care/beauty products have a relatively high degree of credibility among US consumers

Key takeouts and implications: Americans' beauty regimes are changing, but not in a wholesale manner

INSIGHT: Alcoholic drinks' consumption patterns and preferences in the US have not changed significantly during the downturn

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

US drinkers appear to have become more value conscious in their at-home alcoholic beverage choices

Private label alcohol is more developed in the US and therefore more accepted as an alternative among US drinkers

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'

INSIGHT: American's 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 Americans' household and laundry care purchases but preferences do reflect other important influences

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

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

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

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

Start planning for the longer-term

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 the US (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 the US and globally, 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 the US, 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 the US

Table 5: Consumer survey: contributing factors to stress among Americans, by gender, 2008

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

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

Table 8: Consumer survey: changing value-consciousness and desire to save money when buying groceries among US shoppers, 2009

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

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

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

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

Table 13: Total private label food penetration and spend ($ millions) in the US, 2002-2012

Table 14: Total private label non-alcoholic beverages penetration and spend (US$ millions) in Europe and the US, by country, 2002-2012

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

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

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

Table 18: Total private label personal care penetration and spend ($ millions) in Europe and the US, by country, 2002-2012

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

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

Table 21: Total private label alcoholic beverage penetration and spend ($ millions) in the US, 2002-2012

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

Table 23: Consumer survey: Americans attitudes towards doing housework, 2008

Table 24: Total private label household care penetration and spend ($m) in Europe and the US, by country, 2002-2012

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

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

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

Figure 3: Only one-in-five US consumers feels that their lifestyle has not changes in light of the downturn

Figure 4: From a personal perspective, the overwhelming majority of US individuals generally look upon 2008 negatively

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

Figure 6: Americans' sense of disillusionment with the direction of the country has been getting progressively worse over the last decade

Figure 7: Nearly half of US consumers are currently dissatisfied with their financial situation

Figure 8: Negativity about the economy at large is greater than that shown towards their personal situation

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

Figure 10: The majority of US consumers do not anticipate economic growth returning until at least the end of 2009

Figure 11: More than two-thirds of Americans perceive the job market to be 'bad' in their region of the country

Figure 12: There has not been a significant upturn in consumer sentiment about their household's financial situation in 2009

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

Figure 14: A spike in personal savings has occurred in 2008-09 reflecting the financial prudence of Americans

Figure 15: US consumers express reluctance about using credit to maintain their lifestyles and an increasing desire to save money

Figure 16: The economic downturn has also been accompanied by additional levels of stress in the US

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

Figure 18: More than a quarter of US citizens became less happy during the period October 2008 to April 2009

Figure 19: The overwhelming majority of US consumers are more value conscious following the downturn

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

Figure 21: There has been a large increase in coupon usage among Americans over the course of 2008-09

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

Figure 23: US consumers' brand loyalty to packaged goods' brands has been compromised in the last two years

Figure 24: Approaching half of US shoppers are routinely buying private label/store branded products in order to save money

Figure 25: Private label range plays a role in where people shop, not just in the US, but globally

Figure 26: Supervalu's emphasis on a multi-tiered approach provides consumers with a strong point of differentiation

Figure 27: The private label market is impacted by a broad range of drivers and inhibitors

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

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

Figure 30: US consumers are adopting various responses to cut back on food and beverage expenditures

Figure 31: There has been little change in the propensity for US consumers to cook an evening meal at home from scratch

Figure 32: There has been little change in the propensity for US consumers to have a takeaway meal at home

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

Figure 34: US consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices

Figure 35: US personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality

Figure 36: Personal care/beauty shoppers in the US are highly price conscious

Figure 37: Around half of US consumers consider private label beauty products to be good alternatives to well known or market leading brands

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

Figure 39: Value consciousness among US drinkers has had similar impact on both on-and off-trade alcoholic drinks' consumption in 2008-09

Figure 40: US drinkers, perhaps influenced a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages

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

Figure 42: Over a third of US drinkers believe that private label alcoholic drinks are good alternatives to market leading or famous brands

Figure 43: Private label alcoholic drinks have the least credibility among US consumers in the beer category

Figure 44: Although US drinkers are price conscious, brand name also heavily shapes preferences

Figure 45: Price led value is still the most influential factor for US consumers' household and laundry care purchases in 2009

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

Figure 47: Americans value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks

Figure 48: Nearly two-thirds of Americans are 'frequent' purchasers of household care products on the basis of value-for-money

Figure 49: Nearly one-third of Americans regularly purchases private label household care products to save money

Figure 50: A small proportion of Americans consider private label household and laundry products to be superior to branded equivalents

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

Figure 52: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term

Abstract

• 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

• 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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