November 3, 2011
With confidence falling for the seventh consecutive quarter according to third quarter global online consumer confidence findings
from Nielsen, consumers around the world are more sensitive than ever
regarding their future spending budgets. For the first time, Nielsen
asked global respondents how they allocate their monthly budget and
where they would increase or decrease spending if their budget expanded
or contracted by 10 percent. “The results are very revealing,” said Dr.
Bala. “Overwhelmingly, there is a sense of weariness and pent-up desire
for a respite; when households contemplate a 10 percent increase in
budget, we see a desire to expand allocation to indulgent categories
like ‘pleasure travel/vacations’ (+29%) and ‘recreation and
entertainment’ (+20%). There is also a sense of economic uncertainty and
a need for a safety net, so consumers also add to their
‘savings/investments’ (+25%).”
On the flip side, when budgets are reduced by 10 percent,
discretionary spend—especially in the areas of ‘apparel’ (-21%) and
dining out’ (-18%)—are reduced. Consumers also indicated a spending cut
back on ‘electronics and appliances’ (-14%). “If the global economic
climate worsens, these three sectors appear to be particularly
vulnerable,” continued Dr. Bala.
In the event of having to make do with a smaller budget, respondents
also indicated a reduction in savings/investment by 10 percent. “The
asymmetry with expansion suggests that while respondents would like to
preserve or add to their savings and investments, they also recognize
that they may be bumping up against harder economic realities,” said Dr.
Bala.
http://blog.nielsen.com/nielsenwire/consumer/global-consumers-face-tough-choices-between-saving-and-future-spending/
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