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American consumers are facing the double whammy of still feeling the effects of recession even as rising costs fuel inflationary worries. They are not alone in the world, though, according to GfK Roper Consulting’s 2011 Mood of the World® Report, which is based on a global survey of more than 32,000 consumers, ages 15 and older in 25 countries.
Consumers’ top concerns, both globally and in the US, are economic ones, followed by key social and other issues:
1. Inflation and high prices (ranks 3rd in US)
2. Recession and unemployment (1st in US)
3. Having enough money to pay the bills (2nd in US)
4. Crime and lawlessness (6th in US)
5. Environmental pollution (11th in US)
US Consumers Cautiously Optimistic
Even though the cost of living in the US rose more than expected in May 2011 as US inflation picked up speed and unemployment rose to 9.1 percent, US consumers have become somewhat more optimistic about their economic well being.
Spain, in fact, has replaced the US as the country with the highest Consumer Recession Index, GfK Roper’s proprietary measure combining economic pressures and reactions to determine the extent to which consumers are affected by prevailing economic conditions.
Middle East Upheaval Triggers Consumer Concern
“One of the countries we looked at especially closely this year was Egypt, because we wanted to see how the recent economic and political turmoil truly affected the country’s people,” says Holly Jarrell, Group Managing Director of GfK Roper Consulting. “It turns out that while Egyptians understandably list crime and lawlessness as their top concern, they also register higher-than-average levels of worry about inflation and recession. In contrast, their already lower-than-average level of concern about pollution has dropped even further, from 8th to 12th place, compared with 5th place globally. When people are preoccupied with concerns about financial and political stability, they tend to put social and other issues on the back burner.”
Global Pressures Still Cap Optimism
Global economies appear to be stabilizing and are showing encouraging signs of growth, but optimism among consumers has been slow to materialize. Sixty-eight percent of respondents in the US and 59 percent globally report that their household experienced at least one negative economic event in the past year such as a job loss, difficulty paying bills, or housing distress of some kind; these numbers are essentially unchanged from the previous year. As a result, many are still feeling very hesitant about buying conditions. Globally, only 17 percent feel it is “a good time to buy” the things they want and need, while 40 percent feel it is “a good time to wait.”
Consumers are adapting to the financial pressures they face in a variety of ways. Half of global consumers have used coupons during the past year –ranking it highest among ten strategies used to save money in 12 of 25 countries. In addition, 84 percent of global consumers have cut back in at least one of 26 areas identified in the survey. One of the most common cost-cutting measures among global consumers is dining out less frequently. Spain has the highest percentage of consumers doing so at 68 percent, compared to 62 percent in the US and 44 percent of consumers globally. Indeed, more than 90 percent of Spaniards made at least one cutback and 96 percent used at least one savings strategy, which along with high levels of economic distress, explains why Spain tops this year’s Consumer Recession Index.
In contrast, consumers in the BRICS nations (Brazil, Russia, India, Indonesia, China, and South Africa) report less economic pressure and therefore take fewer actions to save money than those in other counties.
“The net result of these shifts is increasing polarization in the global consumer mindset,” said Jarrell. “In some countries, like Brazil and Korea, there is a notable spender mentality, often fueled by a productive workforce and access to resources, not to mention high expectations on consumers’ part, all of which serve to drive economic growth. In other countries, economies still falter and consumers remain skittish.”
The Mood of the World Report also suggests that optimism is still tempered and closely tied to the lingering effects of the global financial crisis. Consumer sentiment and attitudes are constantly evolving and, until financial stability is perceived by consumers, the financial pressures they face will have a direct correlation to the actions they take.
About Mood of the World
Mood of the World® is part of the GfK Roper Reports® Worldwide consumer trends service. Conducted annually by GfK Roper Consulting since 1997, GfK Roper Reports Worldwide offers subscribers a globally comparable view of consumer attitudes, values, behaviors, and cultural influences. Interviews were conducted among more than 32,000 consumers ages 15 and older in 25 countries from January to April, 2011 using a mixed-mode interviewing methodology. Data from each country were weighted to match key demographic norms (e.g., age, sex).
About GfK Roper Consulting
A division of GfK Custom Research North America, GfK Roper Consulting is comprised of GfK’s syndicated consumer trend services — GfK Roper Reports® US, GfK Roper Reports® Worldwide, GfK Roper Green Gauge® and the GfK Roper Youth Report — which monitor consumer values, beliefs, attitudes and behaviors in the US and more than 25 other countries. GfK Roper Consulting’s mission is to help clients turn insights into inspiration and foresight into advantage worldwide.
About GfK Custom Research North America
Headquartered in New York, GfK Custom Research North America is part of the GfK Group. The GfK Group offers the fundamental knowledge that industry, retailers, services companies and the media need to make market decisions. It delivers a comprehensive range of information and consultancy services in three business sectors—Custom Research, Retail and Technology and Media. The no. 4 market research organization worldwide operates in more than 100 countries and employs over 10,000 staff. In 2010, the GfK Group had revenues of EUR 1.29 billion (approximately US$ 1.7 billion). For more information, visit www.gfkamerica.com. Follow us at www.gfkinsights4u.com or on Twitter @gfkamerica.