Global consumers would spend on vacations, recreation, entertainment and add to their savings if their budgets increased 10%, would cut back on clothes, restaurants and electronics/appliances if their budgets were cut 10%: Nielsen

Cindy Allen

NEW YORK , November 4, 2011 (Nielsen) –
With confidence falling for the seventh consecutive quarter according to third quarter global online consumer confidence findings from Nielsen, consumers around the world are more sensitive than ever regarding their future spending budgets. For the first time, Nielsen asked global respondents how they allocate their monthly budget and where they would increase or decrease spending if their budget expanded or contracted by 10 percent. “The results are very revealing,” said Dr. Bala. “Overwhelmingly, there is a sense of weariness and pent-up desire for a respite; when households contemplate a 10 percent increase in budget, we see a desire to expand allocation to indulgent categories like ‘pleasure travel/vacations’ (+29%) and ‘recreation and entertainment’ (+20%). There is also a sense of economic uncertainty and a need for a safety net, so consumers also add to their ‘savings/investments’ (+25%).”

On the flip side, when budgets are reduced by 10 percent, discretionary spend—especially in the areas of ‘apparel’ (-21%) and dining out’ (-18%)—are reduced. Consumers also indicated a spending cut back on ‘electronics and appliances’ (-14%). “If the global economic climate worsens, these three sectors appear to be particularly vulnerable,” continued Dr. Bala.

In the event of having to make do with a smaller budget, respondents also indicated a reduction in savings/investment by 10 percent. “The asymmetry with expansion suggests that while respondents would like to preserve or add to their savings and investments, they also recognize that they may be bumping up against harder economic realities,” said Dr. Bala.

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