By far, North Americans are the mostly likely to make a shopping trip to stock up on groceries, with 60 percent of North American consumers indicating their primary reason to make a trip is to stock up on staples. By contrast, 18 percent say they make a trip to pick up a few items, and just seven percent say they shop when they run out of something at home. “The impact of high gas prices in the U.S. has prompted consumers to combine errands and trips,” said Hale. “This trip consolidation has resulted in a reduction in small grocery trips in the U.S.”

A more even distribution of shopping trip missions is reported in Europe, where 37 percent say they stock up on grocery trips, one-in-five (21%) shop when needing a few essential items, and 25 percent make a quick shopping trip when they run out of something at home. “Retail trip missions in Europe are dictated by store infrastructure,” said Jean-Jacques Vandenheede, Director Retailer Industry Insights, Nielsen. “In countries where shoppers have a high density of stores to choose from, such as in Italy or Germany, shoppers tend to shop more often. In countries that are dominated by hypermarkets with less retailer availability, stocking-up is the more dominant shopping pattern.”

Conversely, stocking up for groceries is less common in Asia Pacific, Latin America and in the Middle East/Africa where roughly one-in-five consumers say that is the primary reason for the shopping trip. Across both the Asia Pacific and Middle East/Africa regions, about one-third of online consumers say a quick trip for needed items is the primary reason for shopping trips (32% and 33%, respectively). A similar, but slightly smaller, number say trips are made to purchase a few essential items (28% of trips in Middle East/Africa and 29% of trips in Asia Pacific). Similarly, in Latin America, the most commonly reported reason for making a shopping trip among one-third of respondents is to pick up a few essential items and one-quarter say they make a quick trip to replenish.

For more detail and regional insights, download: Shopping & Saving Strategies Around the World.

While South Africans were the most pessimistic in Nielsen’s Middle East, Africa and Pakistan region, the decline in confidence was hardly unique. Global online confidence declined for the first time in six quarters as economic recovery hit a stumbling block and recessionary jitters again reverberated around the world. Consumer confidence in the U.S. fell to its lowest level on record in the second quarter

Roughly two-thirds (66%) of South African survey respondents said that they believed that their country was in a recession. They are also no longer as upbeat about their job prospects; with half believing that employment opportunities were not good – a 3 percent rise from the same period a year ago. Almost half (46%) felt negatively about the state of their personal finances, a 2 point rise from Q1, and 83 percent said that they had adjusted their spending habits to save on household expenses, an 18 percent increase from the previous quarter. Almost a quarter (24%) said they have no spare cash.

The major concerns for South Africans in Q2 2011 are no different from the previous two quarters: increasing food and fuel prices, rising cost of utility bills, job security, debt, the economy and crime. “Rising food prices are taking its toll on consumers worldwide as more and more households are spending a higher proportion of their disposable income to put food on the table, and South Africa is not exempt from this trend,” said Diane Johnstone, Managing Director, Nielsen Southern Africa. “South Africans may have weathered the worst of the storm, but the frugal behavior prevalent in 2010 will continue into 2011 as headwinds to growth persist. As disposable income continues to shrink, consumers are constantly re-adjusting their spending patterns to save on household expenses by cutting-back on non-essential, luxury items and activities.

Retail Landscape
The retail sector was affected by these changing consumer patterns, posting slowing growth in 2010 with majors outgrowing non-majors. Overall sales of fast-moving consumer goods (FMCG) grew 3.3 percent in 2010 compared to last year. By contrast, growth in 2009 was up 14.6 percent from 2008. Price increases accounted for about half of the growth in 2010 compared to almost 82 percent in 2009.

Inflation has been on the rise since the start of the 2010, but while many countries are experiencing skyrocketing prices for basic goods, South Africa has seen some deflation among several staples categories such as rice, corn meal, flour, margarine and tuna. All of this is good news for consumers, who are highly price-driven. Meanwhile, prices for fresh milk, ready-to-eat meals, instant coffee, carbonated soft drinks and sugar all rose. Nonetheless, retailers are increasingly optimistic that volume growth will be promising in 2011.

So where are consumers spending their money if not on food? A review of consumer spending trends over the period 2000 to 2010 shows that of discretionary disposable income, the average consumer spent three percent more on out-of-home entertainment (from 35% in 2000 to 38% in 2010). Meanwhile, communications, which encompasses cellphones, Internet and cable/satellite TV, almost doubled during the decade, from 11 percent of spending in 2000 to 21 percent in 2010.

Modern trade has continued to expand, and now accounts for more than 62 percent of all FMCG trade in South Africa. Nielsen has noted a consistent annual shift of one to two percent of trade moving from traditional channels to modern trade. Branded retailers, such as Shoprite and Pick n Pay, continued to grow at the expense of smaller, independent retailers, which are also being squeezed by wholesalers. Shoppers at branded outlets not only visit them more, but also spend more per trip. Nonetheless,independent retailers continue to have the highest level of market penetration.

While most categories saw overall value and volume declines in the first quarter compared to a year ago, one category stood out for growth on both measures: dry groceries. Comparing trends from Q1 2010 to Q1 2011 tells a slightly different story, however, with several categories (toiletries, dry groceries, perishables and household goods) recording solid growth in both value and volume. Key gainers over the past year include ready-to-eat meals, canned pilchards, instant coffee and toilet tissue. Much of the growth was driven from middle income consumers.

South African retail brands, or private label, currently make up about 11 percent of the market (excluding fresh food), the highest among developing markets, but still below developed markets. Overall share has remained stable, but value-oriented South Africans have taken to retail brands in a number of categories including chicken (38% of category) and dishwashing liquid (36% of category). Most notably, consumers from the higher income levels have turned to retail brands with some enthusiasm, and 60 percent of the retail brand market value comes from these shoppers. Nevertheless, there remains room for significant growth with middle income consumers, provided retailers know what drives the performance of private label brands.

Aside from brick-and-mortar shops, online commerce has taken off in South Africa. Fully 71 percent of the six million Internet users in the country are online shoppers.

Challenges for Retailers
Promotions are a boon to budget-conscious consumers, but present a number of challenges for retailers to overcome. For instance, reaching the consumer is difficult, particularly in a country as diverse as South Africa, where profiles can vary by a few kilometers. National retailers need to manage overall shopper engagement while remaining locally relevant and focused. Meanwhile, competition in the food category is intense, as grocers – branded and independent – are fighting for a larger share of sales. Ready-to-eat meals and in-store solutions are gaining popularity, while liquor, pharmacy, food courts and hardware all continue to grow at a faster pace than the center store.

Strong advertising growth in the Asia-Pacific region (+7.6% over Q2 2007) drove the increase, according to data released in Nielsen’s latest Global AdView Pulse report.

Ad spending trends worldwide showed significant variations — with overall advertising declines recorded in North America (-1%) and Europe (-3%).

In North America, U.S. ad spending was down by approximately 6%, compared with the same period last year, while ad spending in Canada grew slightly (+1.7%).

In Europe, the drop in ad spending affected all industry sectors and all media — except radio, which rose by almost 1% during the second quarter of this year.

In Asia Pacific, all four major media types (TV, magazines, newspapers, and radio) grew over Q2 2007, despite the detrimental effects of the May 2008 earthquake in China’s Sichuan Province, the Japanese recession, and general softening of the economy.  Of the twelve Asia-Pacific countries Nielsen tracks, only Japan, South Korea, and Taiwan showed declines in second quarter ad spending.

Globally, most industry sectors showed increased ad spending in Q2 2008, as compared with Q2 2007 spending.  The Automotive, Telecommunications, Financial, and Durables categories, which recorded decreased advertising investment in the second quarter of this year, were the only exceptions to that trend.

Among the mediums tracked by Nielsen – television, print, radio, outdoor, cinema, and Internet (where available) — TV showed growth (+3.8%), while all other media recorded ad spending declines.

Nielsen’s report is based on advertising data from 28 markets in Africa, Asia Pacific, Europe, and North America.

View the full press release.