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

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

Published By: Datamonitor
June 2009
R313-51635
Online Download $2,295.00
Global Site License $5,737.50

Description

Introduction

90% of UK 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 UK consumers experienced a worsening financial situation, falling job security and falling confidence in the housing market in 2008-09

Scope

Detailed analysis documenting UK 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 UK
In-depth analysis of UK shoppers' changing price sensitivity, value consciousness and attitudes towards private label across four major FMCG sectors
Countries and categories covered: UK; food and non-alcoholic beverages, alcoholic beverages, personal care and household care

Highlights

53% of UK 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

39% of UK 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 more than half of UK shoppers, lower prices have a high amount of influence over where people do their shopping. Nevertheless, the quality of products sold has more 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

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 UK consumers has intensified with the widespread belief that they're living in a recession; The economic downturn has had a discernable impact on the lifestyles of more than half of UK consumers; Key takeouts and implications: a 'recessionary mindset' has not yet been fully matched by a recessionary impact on the lifestyles of UK consumers; TREND: Lower consumer confidence is reflected by a generally negative outlook among UK consumers; UK citizens are generally downbeat about how things are going and this appears to be negatively impacting perceptions about quality of life; Key takeouts and implications: the mood towards the direction of the UK has further dampened and less than half express explicit satisfaction with their quality of life; TREND: UK consumers have lost confidence in their financial security and are being more scrupulous in response; Satisfaction with one's financial situation is low among UK consumers; Perceptions about the economy, job security, financial status and the housing market in the UK have all worsened and there is only limited optimism for the six months ahead; UK consumers are managing their finances more closely with some even struggling to pay the bills; UK consumers are making greater efforts to save while negative attitudes towards credit prevail; Key takeouts and implications: UK consumers 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 UK 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 UK citizens have declined in line with the global economic crisis; Key takeouts and implications: recessionary consumers in the UK are in greater need of emotional and physical 'pick-me-ups'; INSIGHT: UK consumers have become increasingly price and value consciousness following the global economic downturn; UK consumers are becoming more value conscious and therefore looking to save money when buying groceries; Price and value consciousness heavily influences where UK consumers do their grocery shopping and how they shop but quality still matters too; Key takeouts and implications: the general value consciousness of UK consumers has intensified and is reflected by how they determine where to shop; INSIGHT: Brand loyalties are under increasing threat as UK shoppers give up brands and increasingly embrace private label; UK consumers are beginning to give up some favourite brands as they make more 'considered' choices; Private labels are becoming more attractive to UK shoppers in the downturn; Key takeouts and implications: the general value consciousness of UK shoppers, combined with their current reflective consumption patterns, will create an optimal platform for ongoing private label growth; INSIGHT: UK consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and preparation; UK consumers are adopting various responses to cut back on food and beverage expenditures; Many UK 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: UK consumers have not been making significant changes to their personal care regimes or product choices; More than half of UK consumers are committed to looking their best in day-to-day life; Price and value conscious personal care/beauty shoppers in the UK have not made notable 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 UK consumers; Key takeouts and implications: UK consumers' health and beauty regimes are proving to be largely recession resistant; INSIGHT: Alcoholic drinks' consumption patterns and preferences in the UK have not changed significantly during the downturn; UK 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; UK drinkers appear to have become more value conscious in their at-home alcoholic beverage choices; Private label alcohol is more developed in the UK and therefore more accepted as an alternative among UK drinkers; Key takeouts and implications: there has been little to no change for around seven in ten UK drinkers suggesting that alcohol is largely 'recession resistant'; INSIGHT: UK consumers' 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 UK household and laundry care purchases but preferences do reflect other important influences; The private label household care market in the UK is small but potentially lucrative given shoppers' desire for value; Key takeouts and implications: UK consumers 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 for shoppers 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 the UK and globally, 2009; Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances in good order, in the UK and globally, 2009; 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 the UK, 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 UK; 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 UK; 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 UK; Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among UK 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 UK shoppers, April 2008-April 2009; Table 9: Consumer survey: the relative cost/value and quality consciousness of UK and global consumers overall when purchasing food and beverage products in 2008; 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 the UK, 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 the UK, 2009; Table 12: Private label food penetration and spend ($ millions) in the UK, 2002-2012; Table 13: Private label non-alcoholic beverage penetration and spend ($ millions) in the UK, 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 UK 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 the UK, 2008-09; Table 16: Consumer survey: attempts made by UK consumers to change their personal care/beauty habits in order to save money, by product category, 2008-09; Table 17: Total private label personal care penetration and spend ($ millions) in the UK, 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 the UK, 2009; Table 19: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic beverage consumers in the UK 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 the UK, 2002-2012; Table 21: 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 22: Consumer survey: attitudes towards doing housework in the UK and globally, 2008; Table 23: Private label household care penetration and spend ($m) in the UK, 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 the UK, 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 UK economy as it develops; Figure 2: More than half of UK consumers 'strongly' believe the country is in recession which is indicative of a deeper 'recessionary mindset' among them; Figure 3: Only one in five UK consumers feels that their lifestyle has not changed in light of the downturn; Figure 4: From a personal perspective, European and US individuals generally looked at 2008 negatively; Figure 5: UK consumers are inherently dissatisfied with how things are going in their country and less than a third are satisfied with their quality of life; Figure 6: Nearly half of UK consumers are currently dissatisfied with their financial situation but the majority associate a good income and having their finances in good order with a sense of wellbeing; Figure 7: As unemployment in the UK rises, so to does the proportion of the population relying on Jobseeker's Allowance; Figure 8: The repercussions of the downturn on the UK economy have been acknowledged; Figure 9: Negativity about the economy at large is greater than that shown towards their personal situation; Figure 10: Only 12% of UK consumers expect economic conditions to improve in the period April 2009 through to October 2009 and 13% think the same about the housing market; Figure 11: UK consumers are managing their finances more closely while nearly a third report difficulties in paying all the bills at the end of the month; Figure 12: Reluctance about using credit to maintain their lifestyles and an increasing desire to save money has been apparent among UK consumers throughout 2008 and 2009; Figure 13: The economic downturn has also been accompanied by additional levels of stress in the UK; Figure 14: UK 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 15: Nearly one in three UK citizens has become less happy following during the period October 2008 to April 2009; Figure 16: The overwhelming majority of UK consumers are more value conscious following the downturn; Figure 17: Quality of products sold has more influence than lower prices or habit over where people in the UK so their shopping which is indicative of a 'want-it-all' value-for-money shopper mentality; Figure 18: The considerable success of Aldi in 2008-09 stems from the high satisfaction ratings against price AND quality; Figure 19: The economic downturn will create new dynamism in battle for market share among UK's supermarkets; Figure 20: Price and value consciousness is influencing where UK consumers do their grocery shopping and how they shop; Figure 21: As the downturn has intensified, so to has the extent to which UK consumers have been forced to sacrifice some of their favorite brands; Figure 22: More than a third of UK shoppers are routinely buying private label/store branded products in order to save money; Figure 23: Private label range plays a role in where people shop, not just in the UK, but globally; Figure 24: The private label market is impacted by a broad range of drivers and inhibitors; Figure 25: UK consumers became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a substantial quality compromise; Figure 26: The attributes deemed most influential in what food and beverages UK consumers buy also highlight the price consciousness shaping the choices they make; Figure 27: UK consumers are adopting various responses to cut back on food and beverage expenditures; Figure 28: There has been little change in the propensity for UK consumers to cook an evening meal at home from scratch; Figure 29: There has been little change in the propensity for UK consumers to have a takeaway meal at home; Figure 30: UK consumers are split on their opinions about how famous branded food products, soft drinks and hot drinks compare to private label equivalents; Figure 31: UK consumers are appearance conscious and this makes them less willing to trade-down when making personal care choices; Figure 32: UK personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to sacrifice on quality; Figure 33: Personal care/beauty shoppers in the UK are highly price conscious; Figure 34: Around half of UK consumers consider private label beauty products to be good alternatives to well know or market leading brands; Figure 35: UK 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; Figure 36: The UK Beer Barometer recently reported a significant drop in beer volume sales in Q1; Figure 37: Value consciousness among UK drinkers has had more impact on at-home alcoholic drinks' consumption in 2008-09; Figure 38: UK drinkers, perhaps influenced a sense of entitlement, are reluctant to opt for cheaper brands and formats of alcoholic beverages; Figure 39: UK drinkers, having become more accustomed to in-store alcoholic beverage promotions, are more heavily influenced promotional offers than consumers from other countries; Figure 40: Over a third of UK drinkers believe that private label alcoholic drinks are good alternatives to market leading or famous brands; Figure 41: Private label alcoholic drinks have the least credibility among UK consumers in the beer category; Figure 42: Although UK drinkers are price conscious, brand name also heavily shapes preferences; Figure 43: Price led value is still the most influential factor for UK consumers' household and laundry care purchases; Figure 44: In 2008, UK household and laundry care choices were made with greater consideration for cost/ value but consumers showed an ongoing desire for efficacy led quality; Figure 45: UK citizens value cleanliness, inherently dislike household tasks and seek to minimize the amount of time they spend on such tasks; Figure 46: More than two-thirds of UK consumers are 'frequent' purchasers of household care products on the basis of value-for-money; Figure 47: Nearly a third of UK shoppers regularly purchases private label household care products to save money; Figure 48: A small proportion of UK consumers consider private label household and laundry products to be superior to branded equivalents, but the majority perceive no difference; Figure 49: The Feed Your Family For a Fiver campaign reflects a shift in communication tact for the number three retailer Sainsbury's; Figure 50: 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

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