By Andrew Starke
Nearly a quarter of Australians have cut down on their alcohol consumption or traded down to a cheaper brand in the past year according to a Nielsen consumer confidence survey.
However, the latest findings from Nielsen’s Global Online Consumer Survey for the third quarter (September 2010) found that Australian consumer confidence has increased and reflects the strongest outlook consumers have had in over two years for job prospects, personal finances and the ability to buy things that they need and want over the next 12 months.
This places Australia as the third most confident market globally boasting a Consumer Confidence Index score of 115 – behind only India (129) and Thailand (117) and a significant 25 points higher than the global average of 90.
The optimistic outlook for the year ahead among Aussie consumers is in contrast to most other developed markets, with 20 of the 53 markets participating in the survey experiencing a decline in confidence in the latest quarter.
Despite the positive outlook among Australians for the year ahead, some cautionary behaviour is still evident with almost half of all consumers channeling their spare cash into savings (47 percent), and 40 percent using surplus cash to pay off debts, credit cards and loans.
In addition, the majority of consumers said to be actively curbing their household expenditure by trying to save on gas and electricity, cutting back on takeaway meals, new clothes purchases and ‘out of home’ entertainment, and making the switch to cheaper grocery brands.
To some extent the liquor industry has been cushioned from the worst cut-backs with 51 percent of consumers indicating they had switched to cheaper grocery brands in the past year while only 22 percent said they cut down on their alcohol consumption or traded down to cheaper brands.
“While it is encouraging to see that Australia is currently the most optimistic developed market in the world, we can’t lose sight of the fact that we are still part of an uncertain and vulnerable global economy,” said Nielsen Consumer Group MD – Pacific, Chris Percy.
“Sales in the Australian retail sector are flattening, grocery basket values are down by five percent on a year ago, and we are seeing significant price compression in store.
“In order to drive growth, retail strategies need to be adapted to meet the needs of the changing shopper landscape; while store segmentation, range and promotion targeting is key to maximizing sales,” he added.