Recessionary Consumer Buying Behaviour
The severity and duration of the slowdown in the US, caused by a combination of structural economic issues, is causing an evident recessionary mindset with the Canadian consumer.
Recessions are very much part of the business cycle but it's the ensuing consumer buying behavior that this article touches upon.
Consumers are cutting their spending habits and are looking for ways and means to save rather than spend. The state of the economy is a dominant concern and with the property crisis and consumers funding their continued spending with unsecured debt, it is no wonder that the 'recessionary mindset' has set in*.
Retail sales, which are a clear indicator of consumer sentiment, are in a decline in North America and most European economies. For the grocery sector, this means 'good value for money' is the most important influence for store choice for 85% of the recessionary consumers globally. However, in spite of the shopper being more cautious and looking for good value, quality remains a decisive factor.
The key for continued success in these trying times is to establish the core areas that offer sustained value generation and also to rethink the brand/product messages to communicate more effectively; for e.g., promoting health or performance benefits over competitors. Rather than trying to change what the brand represents through constant price cuts and endless promotions, focus needs to be shifted to Value.
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Source: DATAMONITOR