Shopper Sentiment Dips to Lowest Point in a Year

As 2012 came to a close, the looming debt ceiling and much talked about “fiscal cliff” certainly did nothing to boost consumer confidence. In fact, SymphonyIRI’s Q4 2012 MarketPulse survey found that shopper sentiment dropped to its lowest point since Q3 2011. While consumers across all age groups feel the strain of ongoing economic strife, those aged 35-54 convey particularly gloomy attitudes, with 43 percent stating that their financial situation deteriorated in 2012.

“Through quarterly analysis of two full years of MarketPulse data, we have consistently seen a solid representation of shoppers with a gray outlook on their financial health,” says Susan Viamari, editor of Times & Trends, SymphonyIRI. “This sentiment remains very prevalent, especially for those aged 35-54, who are really influencing trends, because they are in their prime earning and family-raising years. On top of today’s economic concerns, this age group also is thinking about college expenses and retirement. All of these pressures are converging to heighten their concern about their futures and leading the way on many conservative shopping strategies and money-saving behaviors, so marketers need to pay close attention to them.”

SymphonyIRI Shopper Sentiment Index
Launched in Q2 2012, SymphonyIRI’s Shopper Sentiment Index provides deep insight into how the economy is impacting consumers and changing how they approach grocery shopping. The Shopper Sentiment Index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100 based on Q1 2011 information, a Shopper Sentiment Index score of more than 100 reflects consumers that are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyle without changes.

The index illustrates that shopper sentiment took a noteworthy uptick in early 2012, with a sizable segment of the population beginning to anticipate sunnier skies ahead. But, when brighter days failed to materialize, consumers’ concerns for their future financial health began to waver and sentiment slid once again. Latest findings from the Shopper Sentiment Index reveal that overall sentiment dropped to 94 in Q4 2012 versus 99 in Q3. This is the lowest point since Q3 2011, and the decline was driven largely by the 35-54 age segment.

Proceeding with Caution
With 27 percent of 35-54 year olds and 22 percent of consumers on the whole having difficulty affording regular groceries, it is no surprise that folks across the board are maintaining their cautious approach to shopping. The following represents prevalent shopping strategies and highlights how 35-54 year olds stack up to the population as a whole:

% of Consumers 35-54
Buy brands other than preferred because they are on sale 29% 115
Select products to create more meals at lower cost 26% 112
Choose products due to loyalty card discount 22% 121
Steer clear of certain aisles to avoid unplanned purchases 15% 120
Use coupons to make lists 37% 109

*Index: Age 35-54 versus Total Population (Average=100)

Saving a Buck
Since the beginning of the economic downturn, consumers have found creative ways to save money. From eating out less to cutting back on doctor visits, consumers are evaluating the money they spend across the board. And, 35-54 year olds are tightening their belts even more than the average consumer. The following are some of the top money-saving tactics from Q4 2012:

% of Consumers 35-54
Eating out less often than before downturn 52% 107
Going to salon/spa less often 50% 109
Self-treating when possible to avoid doctor visits 40% 113
Using less over-the-counter medications to save money 35% 111
Sharing more products among household members 30% 119

*Index: Age 35-54 versus Total Population (Average=100)

Living on the Cheap
The lifestyles of the rich and famous are a long-forgotten dream, and simplicity is the new sophistication in today’s world. For instance, lavish meals in restaurants have been pushed aside for dining in, with 42 percent of 35-54 year olds versus 36 percent of all consumers going out with family and friends and socializing less often. Instead, 37 percent of 35-54 year olds and 32 percent of all consumers are eating more family meals at home. And, it doesn’t stop there. On average, 40 percent of consumers are bringing snacks and food to work and school to save money. Those aged 35-54, in contrast, are a whopping 22 percent more likely to do so.

“Those aged 35-54 have already established relationships with CPG banners and brands,” adds Viamari. “However, given the level of concern they are feeling about their financial stability, the ball is now in the court of marketers, who can help them navigate these tricky waters with the right product assortments, promotions and pricing.”

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