Credit crunch spending trends show surprising quirks
By The Holland Times Friday 16 October 2009, 16:10
The worldwide economic slump has affected everyone. But how have consumers been adapting their buying behaviour in these troubled times?
Economic statistical indicators show that consumers have been controlling their spend in various areas, however, the food sector has seen only limited effects from the recession,. Within the food sector, the restaurant experience seems to have suffered the most from the current economic climate.
Over 75% want to save
According to research by the EFMI Business School published in June, over 75 percent of Dutch people think that they should save on their household budget, and do this by going out for meals less often, or by ordering and buying fewer take away or ready made meals. In total, over 40 percent of all Dutch households have already tightened their belts when it comes to eating out. The research also shows that 30 percent of respondents are currently feeling the effects of the recession on their household budget, whereas 41 percent think that they will start to feel the effects in the coming months. Fifty-six percent think that their household budget is recession proof and 27 percent already feel the effects and think things will only get worse in the coming months.
Dining downtrading
According to the Food Services Institute Netherlands (FSIN), almost a quarter of all Dutch households are also saving money by shopping at speciaalzaken (specialty stores) less frequently. Meanwhile, supermarkets have hardly felt any ill effects of the decreased consumer household budget spending. According to the institute, another phenomenon has raised its head during the downturn.
"The consumer is really 'downtrading' at this moment. What this boils down to is that we all want to maintain our lifestyles, and in order to do so we have to play it smart,'' says Jan-Willem Grievink, Director of FSIN. "This could mean that we go out for meals less frequently, in favour of packed lunches or cooking at home, but also that we may choose cheaper places or take advantage of special offers. We go for tapas instead of steak, or we order two courses instead of three at our favourite spots."
Dining downtrading is already a widespread phenomenon in markets like the US and UK, and the trend is picking up here in the Netherlands, according to FSIN. Supermarkets, fast-service chains and convenience stores benefit most from this trend, as consumers are heading for their own kitchens or getting their food from cheap ready-made sources.
As a result, Grievink says Dutch consumers are now consuming a little less out of home and a little more at home. "We do not have any detailed information about all the different channels at the moment," he says, "but overall you see that out of home spending is decreasing by around six percent."
This has actually led to consumers indulging themselves more when they do eat out, for, when consumers decide to spend money on eating outside of the home, "they really want it to be special," explains Grievlink. "They sit longer on the terraces, but consume less."
Honing in on Home Brands
While consumers may not be cutting back their household budgets by much, every little bit counts. According to recent research, consumers seem to be favouring supermarket home brands more and more. An annual study that looks at consumer trends in Dutch supermarkets, published by Deloitte, has shown that 62 percent of Dutch consumers do not believe that supermarket home brands are inferior in quality to so-called A-brands.
In fact, the vast majority (89 percent) said that they will continue to buy supermarket home brands that they liked. Approximately half of the consumers said that a good home brand is one of their reasons to shop at a specific supermarket. For more than three quarters of the respondents, price was the most important reason for buying supermarket home brands. The vast majority of consumers felt that home brands are of comparable quality to A-brands and almost two-thirds of the consumers said that they had no problems with buying the home brand if the A-brand of their choice is not available.
"In general, the difference between A-brands and home brands seems to have become smaller. While the number of home brands available on supermarket shelves keeps increasing, three quarters of the respondents feel that there are still enough A-brands available," says Paul Op Heij, Partner of Deloitte's Retail arm.
Range important
The Deloitte consumer study also showed that the range a supermarket carries plays a big role. For two-thirds of consumers, a supermarket's assortment is a good reason to favour a particular supermarket.
"This applies vice versa too. For almost half of the consumers a supermarket's assortment is also a reason not to shop at a specific supermarket (any more). Therefore, it is important that supermarkets take consumers' assortment complaints seriously," says Op Heij.
Almost a quarter of the respondents have lodged a related complaint in the last year, or considered doing so. That is more than in previous years, according to Deloitte. In most cases this concerns products that are not available, items that have passed their expiry date or complaints about the quality of a product.
