Kiwi Confidence Rebounds

News release
For immediate release

Kiwi Confidence Rebounds

As consumers recover from the global recession, work/life balance is now a bigger concern than the economy

AUCKLAND, 12 NOVEMBER 2009 – The world is emerging from the economic crisis, and with it, global consumer confidence is rebounding, according to the latest edition of the Nielsen Global Consumer Confidence Index, which jumped nine points this month to 86 index points, up from 77 index points in April.

Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending habits among more than 30,500 consumers in 54 countries, including 500 consumers in New Zealand, with the latest round of the survey conducted between 28 September and 16 October 2009.

Among the 54 markets in the survey, New Zealand posted one of the most improved confidence levels compared to other markets around the world. With double-digit increases in consumer sentiment (up 10 points to 100 in the six months to October 2009) and with a score of 14 points above the global average, New Zealand ranked as the eighth most confident country in the world, behind fast developing nations including India, Indonesia, Brazil and the Philippines. Looking at the change in sentiment from June to October 2009, most of the core markets around the world showed some improvement – but the most rapid recovery in confidence was seen in Australia, New Zealand, Hong Kong and Brazil (refer to Chart 1), while the US recorded its first increase in consumer confidence since 2007.

“A 10-point surge in consumer confidence signifies a major turning point for New Zealand,” notes Rob Clark, Managing Director, Consumer Division, The Nielsen Company New Zealand. “It demonstrates that in the last six months, our consumer sentiment has shifted gears from recession to recovery – the tide has turned.”

Clark also observed that: “We have seen steady increases in sales in the grocery sector over the past few months, while online sentiment (buzz) regarding the recession is at the lowest levels since we began tracking that dynamic in January 2009.”

However, the survey results show that consumers are still operating with an underlying air of caution. Close to half (47%) of consumers said they would be channeling their spare cash into saving, while 41 percent said they would be focused on debt recovery. Interestingly, it is no longer the economy or job security that are our biggest concerns like they have been for the past couple of years – work/life balance now tops the list with 13 percent of respondents citing it is their major concern followed by job security, with 11 percent saying employment concerns are keeping them awake at night. (Refer to Chart 2).

“The fact that the economy and job security has become less of a concern to us is another indication that consumers’ obsession with everything economy and recession-related is beginning to subside. However, the work/life balance factor potentially highlights the struggle consumers have felt in the workforce during the downturn, and they now want some stability and breathing space during this period of recovery,” says .

The survey also showed that over two thirds (67%) of New Zealand consumers said that compared to a year ago, they have changed their spending habits to cut back on household expenses. Even as the economy recovers, over half (56%) of these consumers said they will still continue to try and save on gas and electricity, 44 percent say they would still switch to cheaper grocery brands and plan to spend less on takeaway meals.

“While talk of the global recession may be receding, this period of uncertainty has brought about what could be a permanent change in consumer values, spending habits and lifestyle choices, and there are indications that as the economy continues to recover – restraint is the new mantra and underlying caution around discretionary spending might be here to stay. Consumers have become more frugal and in order to feed their growing demand for value, they are prepared to shop across multiple banners and channels, they are heavily reliant on price discounting and promotions, and they are buying more Private Label than ever before.”

Ends

© Scoop Media