Consumer confidence on the wane in developed countries
22 Jun 2011
Despite talk of a recovery, consumers feel more apprehensive about the future than they did before the downturn, reveals a new report by The Boston Consulting Group (BCG).
In the US, 57 per cent of respondents said they have been personally affected by the downturn - up 8 percentage points from last year - while Europe saw a 6 percentage point increase.
BCG's 2011 global report on consumer sentiment, Navigating the New Consumer Realities, covering over 24,000 consumers in 21 major economies, finds that anxiety is on the rise everywhere, but confidence is closely tied to the economy of specific countries.
Nearly 70 per cent of Italians say they feel anxious about the future, whereas Germany is the only country with a significant decline in anxiety, reveals BCG's supplemantary report on individual countries, Consumer Dynamics in Flux Around the World.
These emotional responses are directly affecting spending behaviour. ''Consumers are trading down and purchasing more private-label products because they feel it's important to get a good deal - not necessarily because they can't afford the price,'' notes Catherine Roche, a Toronto-based partner and coauthor of the report. ''Trading up has shifted from conspicuous to 'conscientious' consumption,'' adds Patrick Ducasse, a Paris-based partner and another coauthor.
But attitudes toward spending are different in emerging markets, where many consumers plan to spend more this year: 36 per cent of Chinese respondents and 19 per cent of Indians said that they plan to increase spending. ''This reflects a widening gap between the developed and emerging economies and underscores the importance of companies de-averaging their markets,'' notes Carol Liao, a Hong Kong-based partner and report coauthor.
