Australia’s resilience in the midst of global economic uncertainty is envied by many of the world’s developed nations. Nonetheless, Australian consumers are increasingly apprehensive about the impact of the world financial situation on their own economy and personal finances. With consumer confidence sliding in the most recent quarter to its lowest level since the global financial crisis of 2009 to an interim index of 97 in August, shoppers are changing the way they spend their money, what they spend it on and where they make their purchases.

The legacy of the global financial crisis has provided many lessons for Australian consumers, and the change in consumer shopping behavior is shaping a rapidly evolving retail landscape.

State of the Nation
Australia is one of the few countries that emerged from the 2008-2009 recession relatively unscathed. With nearly full employment, one might expect Australian consumers to be confident in comparison to other nations. But there are a number of factors darkening Australians’ outlook: some analysts expect higher unemployment, which increased in July. In that same month, inflation went up 0.3 percent to 3.6 percent, causing the prices of basic necessities to increase. Likewise, utility rates are higher, there is uncertainty about the carbon tax and its likely effects on the average household, and massive market fluctuations caused by economic jitters in the U.S. and Europe have made investors nervous. Finally, natural disasters in neighboring New Zealand and Japan have taken their toll. These factors have Australian consumers acting with an almost recessionary mindset, exhibited by a renewed desire to save for the long term and to cut household budgets.

These conditions have resulted in a number of new shopping trends:

• The average number of store visits is down (with the exception of online visits) and shoppers may visit four or more stores to fill their shopping needs in search of discounts.
• Shoppers are increasingly looking for value, and the major supermarkets are attracting more and more shoppers with promotions, at the expense of convenience stores, independent supermarkets and specialty outlets.
• Shoppers are buying more private label goods.

What’s a retailer to do?

Private label is one area where retailers can differentiate themselves. Nearly two-thirds (64%) of Australian households already think that private label products are as good as name brands, and the overall spend on private label goods accounts for nearly a quarter (24.6%) of the total money spent at grocery stores in the most recent quarter—up from 23.1 percent in the same period a year ago. This growth has been driven by lower prices and improved, consistent quality, resulting in volume growth from all shopper demographic groups.

Nielsen’s latest Retail Barometer survey indicates that the success of a retailer in volatile economic periods is not just measured on the best product and price offerings, but the extent to which retailers can leverage their existing trading relationships with suppliers, and how well they can execute their strategies in driving efficiencies and balancing promotions, leading to increased footfall and profits.

Despite a constantly shifting retail landscape, one thing is certain: retailers and suppliers must adapt to the changing habits of Australian shoppers who are becoming increasingly skittish about their country’s economy. According to Nielsen’s latest quarterly global consumer confidence survey, Aussies have indicated that even when economic conditions do improve they will continue to be frugal. This means that getting the right value proposition is of paramount importance – those retailers and suppliers that understand how consumers are feeling and adjust their strategies accordingly should be well positioned to capitalize on these trends.

Nielsen recently did a comparative study across the key countries participating in the CWC using econometric modeling techniques to measure advertising’s impact on sales in select impulse categories (return-on-investment, or ROI). In the analysis, which was conducted in South Africa, India (which co-hosted this year’s tournament), New Zealand, Australia and the U.K., Nielsen found that there was an average sales boost of 3.5 percent, with Indians being the most reactive.

Carbonated soft drinks and potato chips were the biggest gainers overall, although some categories were more popular than others based on locale. India and New Zealand were the two markets with the most reaction to the CWC 2011: in India, there was an average uplift of 25 percent and in New Zealand, 12 percent, in the categories under consideration during the tournament. A large portion of these sales can be attributed to increased media investment and improved efficiency (ROI).

• Soft drinks: Thanks to a 66 percent increase in media spend during the CWC quarter compared to the same period a year prior, sales of sodas grew 10 percent in India, with media contributing 5 percent of total sales. In South Africa, sales rose 6 percent during the CWC.
• Potato chips and salty snacks: New Zealand saw the biggest growth in this category with sales up 11 percent; ROI increased by 8 percent. Indians also ate more crisps, with the category posting a 3 percent sales increase and an ROI rise of 3 points. Indians gobbled up other salty snacks, with the category posting a 38 percent sales increase and the ROI was up 4 points versus the previous year.
• Beer: Denizens down under quaffed more beer during the tournament. In New Zealand, sales rose 8 percent, driven by a 43 percent increase in media spend. Media contributed about 3 percent to sales during this period. Australians bought roughly 6 percent more beer, with ad spending rising 13 percent. In South Africa, media spending rose 65 percent while sales grew 2 percent.
• Chocolate: Sales grew most in New Zealand and India, 24 percent and 22 percent, respectively. In the former, much of this growth can be linked to a surge in ad spending, with some chocolate brands relating themselves to cricket. In India, media had less of an impact, contributing to just 1 percent to sales.

“This research provides clear evidence of the power of advertising during the CWC. With such a huge audience, advertisers can not only reach millions of people around the world and boost brand awareness, but also drive real sales growth. Media proved twice as effective during the event compared to normal advertising. The brands that did the best were those that linked themselves to the game and the event,” said Tom Hall, Marketing ROI Solutions Leader, APMEA & India, Nielsen. “These lessons can help companies determine budgets and identify which categories might see the greatest sales uplift during future global sporting events such as the upcoming Rugby World Cup and the 2012 Olympics.”

It is undoubtedly a challenging time for Australia’s grocers. Consumer confidence is down due largely to concerns about the economy and rising food prices and utility bills. As a result, shoppers are tightening their belts and looking for ways to make their dollars go further.

To reach consumers, major retailers are aggressively promoting “value” to drive foot traffic and achieve higher basket values and embarking on a two-tier pricing strategy which combines Everyday Low Price (EDLP) on household essentials, together with Hi-Lo promotional activity. Both actions have challenged the grocery industry’s established equilibrium, and as a result of deflation driven by the aggressive pricing campaigns of the major retailers, the average spend on packaged groceries (excluding fresh produce) has declined versus a year ago. Coupled with an increase in above-the-line ad spending by major retailers, the grocery channel is undergoing significant shifts, with declines in the contribution of independent retailer and non-supermarkets being the most evident.

Consumers Shop Around – Loyalty Suffers
As the retail landscape continues to evolve, shoppers’ behaviors are changing with it. Allocation of household spending between competing stores and brands is also evolving. The average number of visits to a specific store is down, with one exception: online. Meanwhile, shoppers’ loyalty to a particular store or brand is largely flat or declining, with one in five shoppers now visiting four or more outlets in a four week period to fulfill their household requirements (up from 13% in 2009), as variety, convenience and “shopping around for the best deal” becomes more apparent.

Adding to this new landscape is the emergence and growth of new retail players such as a major club store that plans to triple its presence in Australia by the end of July (two new stores, one Sydney and one in Canberra, will add to one current store in Melbourne). This provides yet another alternative store format for shoppers to patronize.

Expanding Online Presence – the Sleeping Giant
Not only are shoppers presented with new formats, they are also presented with multiple avenues to purchase from these stores, such as online and car park collection. Further, we are seeing growth in parallel imports marketed via new online channels such as offyourtrolley.com.au and groupon.com.au. Each of these new channels is contributing to the changes we are witnessing across the grocery landscape, forcing long-established retailers to rethink their overall offer to shoppers.

Then, of course, there is online grocery retailing, which could be described as something of a sleeping giant in the Australian market. Online grocery shopping in the UK and U.S. is now a fast growing and important sales channel. In 2010, U.S. online FMCG sales reached $12 billion, representing close to 2% of all FMCG sales; by 2014, that figure is expected to double to $25 billion.

In Australia, online shopping for FMCG products has been slow to take off, but there are signs of growth: 8.2 percent of Australians (aged 14+) claim to have purchased food or groceries online in the past 12 months to April 2011, up from 7.1 percent a year ago. This suggests that significant opportunities exist for those retailers who know how to effectively use the Internet to reach shoppers.

Strategies for Growth – Mix it Up
How can retailers and suppliers in the Australian grocery sector spur growth? The key is to identify new shopper touch points. Advertising budgets – which have seen large swings over the past two years – are now stabilizing. My colleague Peter Cornelius, Managing Director of Nielsen’s Media business in Australia, recently noted in an interview that while advertisers had invested little in 2009, 2010 saw strong growth, but off a very modest level, and we are now seeing the market return to an acceptable level. TV continues to be the primary medium for grocery advertising, accounting for two-thirds of spending, followed by magazines. The real opportunities to engage with consumers exist as a result of continued media fragmentation, whether through social media, interactive targeted marketing, or even awakening the online shopping giant.

The rate of change in the grocery sector is accelerating, but so are the openings for creative marketers who understand shoppers’ needs and demands, and can maximize opportunities within the landscape.

Our latest Top Media Advertisers report delivers a positive outlook on Australia’s advertising industry, with a strong rebound in ad spending to an estimated $10 billion plus.

As the advertising recovery gained momentum in the first half of 2010, there were substantial year on year increases in activity particularly among the major spending categories that were most impacted by the advertising cutbacks of 2009; including Motor Vehicles (+14%), Finance (+13%), Real estate (+19%), Communications (+12%) and Insurance (+12.8%).

The report contains good news for all 10 main media sectors with most recovering from the dip in advertising revenues during 2009 and building on a stronger revenue base for the year ahead. Overall, advertising spending in 2010 by our estimates increased by almost 10 percent over 2009. In the case of advertising performances across Television in the major Metropolitan and Regional markets, estimated spending lifted to almost $4 billion; representing nearly 40 percent of all Australian media spending.

2011 Outlook
The levels of growth across most of 2010 have certainly slowed in 2011; albeit reflecting that media activity has returned to business as usual pre GFC trends. Recent media reports indicate patchy results across some media, possibly due to the recent devastating floods and cyclone damage, consumer caution over escalating food and energy costs, and concerns over the impact of the Government’s proposed carbon trading levy.

However, our dollar is currently at parity to the U.S. dollar, our commodity export markets have maintained positive economic performances, particularly China and India. All these factors considered, our advertising sector should still maintain solid growth over 2010.

For more, download the Top Media Advertisers Sampler Report: Australia

Nielsen recorded an overall volume jump of 19 percent in August, with the major news publishers being the key beneficiaries of the increase in traffic.

Amongst the major news sites, Nine News saw the largest increase in mobile traffic in August, up 27 percent from July 2010. Fairfax Digital’s SMH and The Age mobile sites were up 21 percent and 18 percent respectively, while News Digital Media’s news.com.au increases 18 percent.

“The increasing ownership of smartphones and more affordable mobile data pricing plans have seen mobile Internet usage increase in recent months,” observes Matt Bruce, Managing Director of Nielsen’s online division in Australia. “This growth was given an extra jolt in August as Australians looked to mobile news sites via their mobile phones for updates on the election results and the subsequent negotiations with the Independents.”

Bruce notes that major spikes in mobile Internet usage to news sites were recorded on the day of the Federal Election and the day following (August 21 and 22), and then again on September 7 as the three Independents announced their decision, and the subsequent news that Labor had won the election.

Richard Reeves, Associate Director – Consumer Research, The Nielsen Company, Australia

Brand promotions are vital weapons in the sales and marketing arsenal, whether they are price discounts, multi-buys or additional quantity. In Australia, it is estimated that up to 30% of all grocery purchases are made on promotion and trends indicate that this could increase among key retailers. This proportion is similar to the U.K., where one-third of groceries are bought on promotion.

Nearby, our New Zealand kin are serious about promotions, with almost half (46%) of all grocery purchases being bought on promotion – reflecting the strong historical value focus of this market.

Just as there are differences between countries when it comes to promotions, there are even greater differences by category – this can range anywhere from 25% of volume being sold on promotion in one category, to a staggering 75% in another!

Clearly, for the manufacturer and retailer, promotions represent significant investment in time and money. So, the question is, how do these promotions affect the Australian shopper and what strategies or tactics can be employed to increase their effectiveness?

The Australian Shopper
Nielsen research has shown that the impact of the global financial crisis caused Australian consumers to re-assess how they spend and shop. We have witnessed a fundamental shift in shopper sentiment from the spendthrift, debt-driven early 2000s to a greater sense of caution and restraint post crisis. We have seen the rise of the “savvy shopper” who is happy to buy private label in one category and premium priced brands in another. We have also seen private label products being launched successfully in more and more categories. It would appear shoppers are becoming more willing to try and stick with these products where they perceive them to be just as good or just plain good enough.

Shoppers are increasingly using coupons and visiting more stores during their shopping trips as they search for the best value. This behavior has been observed in Australia with shoppers increasing their store repertoire. Furthermore, 30 per cent of Australian shoppers claim “they will still look for cheaper grocery brands even though the crisis is over” (Nielsen Global Consumer Confidence Survey, June 2010).

Given the shoppers’ search for value, a promotional strategy looks to be an excellent response. However, relatively speaking the Australian shopper is less sensitive to promotions than shoppers in other countries.

We see in this chart that nearly half the shoppers claim promotions rarely change their brand choices, or they only buy promotions when they already like the brand.

It is a minority who claim to regularly buy different brands because of promotions. These results are congruent with the view that shoppers tend to have a limited number of brands that they buy regularly even if their total repertoire is quite broad.

Australian shoppers’ knowledge of the prices they pay is relatively weak  with nearly half unsure of what they actually pay.

Nielsen research has found that in some heavily promoted categories such as beer and bread, (among consumers who have some knowledge of price); shoppers believe the promoted price is the normal price – not the shelf-price. So, it appears that the number and frequency of promotions has fundamentally shifted shoppers’ price perceptions.

There is also strong evidence that shoppers are aware that another promotion ‘will be along in a minute’ and are willing to wait. This can be seen across the grocery channel and in other areas such as the petrol market with the “cheap Tuesday” phenomenon, the automotive equivalent of pantry stocking, i.e., filling the tank.

So what options are open to the manufacturer in the face of these almost contradictory behaviors of the shopper, that is, being value-focused, but uncertain of the shelf price? We all know sales increase when brands are promoted, but are these additional sales profitable and is the promotion actually supporting the brand?

Key Considerations for Promotions

1. Is the promotion a tactical response to competitor activity? For example, is it a response to a new entrant into the category; or is it to take advantage of above-the-line support? The strength of the brand’s equity and percentage of volume sold on promotion versus its shelf price need to be understood. Relatively speaking, stronger brands tend to sell more at full price than their weaker competitors.
2. Does the promotion increase the number of households buying the brand (household penetration) or does it increase the amount spent on the brand per household (Average Weight of Purchase – AWOP)? If it is the latter, the promotion may be rewarding loyal buyers and protecting share, but may undermine a brand’s price premium in the long term.

To understand if the additional sales are coming from new households (increased penetration) or increased AWOP, one needs to use actual purchase data from services such as Nielsen Homescan.

Nielsen has found in a number of categories that there are a proportion of shoppers who only buy on promotion. We have seen this group to be as high as 60% in some categories. While shoppers are loyal to specific brands, when their preferred brand is not on promotion it’s likely a competitive brand they know and may be partial to is. The role of the preferred brand in this situation is to ensure the competitor is only considered and not purchased.

This presents a dilemma for the brand. Above-the-line support may be needed to help reinforce the brand and its unique position, but if funds are diverted from in-store promotional support, it will lose significant share. Innovation within the category may be the only way to break the promotional cycle.

Additional Considerations

• How does the brand repertoire change when on and off promotion?
• What is the depth of the price cut, and how deep does it need to be to be effective?
• Is it better to have more frequent promotions with smaller price reductions or the opposite?
• Is the promotion reflective of historical practices? For example, if the brand has always had a promotion at Easter. Is this really the best time for the promotion?
• Is the promotion communicating the right message about the brand?
• And finally, will the promotion generate additional profit, as well as generating additional volume?

We know shoppers are looking for value, or at least value among their preferred brands, so communicating the promotion and using the best triggers is vital to maximize its impact. Therefore, are gondola ends and shelf labels enough to drive awareness of the promotion; or is it worth considering additional communication channels?

Given the importance of promotions, it is vital to treat them with the respect they deserve, as their correct use can drive the brand and profitability. Conversely, ill-considered promotions can weaken a brand and undermine a company’s bottom line. So, the question remains: Can you identify what purpose your promotion is serving?

• Download the Asia Pacific Social Media Trends webinar and related materials.

Several Western Europe economies, namely Germany, United Kingdom and France, reported moderate growth in Q1 with consumer spending between 1% and 4%. However, the escalating European debt crisis that has damped confidence in Q2 may impact future growth. In North America, the contrast between increasingly optimistic Canada and cautiously restrained U.S. is being reflected in dollar sales. Across both the U.S. and Canada consumers are cutting back on shopping trips, seeking value and establishing a balance of branded and store brand purchasing.

Advertising spending also improved in Q1 as 25 of the 31 countries reported in Nielsen’s Global Ad Spend Report experienced gains of greater than or equal to 5%. Two globally significant events – Winter Olympics and FIFA World Cup – were driving forces behind this trend. Economically struggling countries Japan, Ireland and Spain were the only countries with flat to declining ad spending in Q1.

What to Watch
In the second half of 2010, against the backdrop of a shaky global economy, consumers in emerging markets will remain more willing to spend on discretionary categories such as apparel, vacation and out-of-home entertainment. In the developed economies where a largely jobless recovery is taking place, the consumer remains very reticent as they are closely monitoring their spending. Value remains the mantra and the new normal is characterized by restraint.

Download the Q2 2010 Nielsen Economic Current.

“While the global economy is in better shape than it was nine months ago, (+7 index points compared to Q3 2009), the ongoing European debt crisis is a major setback to the global economic recovery anticipated this year,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company. “U.S. consumers closely watched unemployment numbers, while Europeans witnessed the government implement new and in some cases, severe fiscal austerity measures amid stagnant job markets and a weakening Euro. Consumers in Western developed economies realized that the road to full economic recovery is going to take a bit longer than expected. In the ongoing weak-to-moderate growth environment, there is some risk for businesses of deflationary pressure, requiring close attention to improving pricing power through more effective deployment of media, innovation and channel marketing efforts.”

“In the U.S., consumers are still focused on repairing their household balance sheets with 45 percent allotting any remaining income (once they have covered their essential living expenses) to savings and paying off debt (37 percent),” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “Until the labor market shows continuous improvement, consumer spending will not be sustainable.”

Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among approximately 27,000 Internet users in 48 countries. In the latest round of the survey conducted between May 10 and May 26, 2010, consumer confidence fell in nine out of 24 European markets. The only non-European markets to post quarter-on-quarter declines were Australia, Thailand, United Arab Emirates, Taiwan, Brazil and Egypt.

Disparity Widens Between Developing and Emerging Markets
India (129 index points), Indonesia and Vietnam (both 119 index points) were the most optimistic nations in Q2, while consumer confidence in Spain plummeted by 10 index points to its lowest level on record at 69 index points from 79 in Q1 of this year.

“In Asia, major economies are experiencing growth headwinds in the form of higher inflation and asset price declines. While overall growth in China, India and elsewhere in Asia will still be strong, some slowdown can be expected as governments and central banks tighten monetary and fiscal policy. Businesses therefore need to exercise more prudence in their resource allocation within Asia,” said Dr. Bala.

Globally, 58 percent of people—the same number as in the previous quarter—said they are still in recession with a disparity in recovery sentiment widening between developed and emerging markets. Thirty-nine percent of Asia Pacific consumers and 51 percent of Latin Americans said they are still in recession compared to 84 percent of North Americans and 76 percent of Europeans. Among those in recession, one in five (21 percent) global consumers thinks the recession will last another year. However, this number increases among North Americans where nearly one in four (24 percent) believes the recession will linger for more than 12 months.

“For most of 2010, the U.S. has seen improvement in the job and housing markets supporting the increases in U.S. consumer confidence, but consumers are still very much focused on value and they continue to reduce their overall shopping trips,” said Todd Hale, Senior Vice President, Consumer & Shopper Insights, The Nielsen Company. “Retailers and manufacturers have responded with heightened promotional support and lower prices providing consumers with great deals. However, even with enhanced prices, consumer-packaged goods dollar and unit sales have declined in the latest three consecutive 4-week periods versus year ago.”

Regionally, consumer confidence steadily climbed three index points in Latin America, two index points in Asia Pacific and North America and one index point in Europe. Latin America topped regional consumer confidence levels at 102 index points, followed by Asia Pacific (101 index points), and Middle East, Africa, Pakistan (MEAP) with 89 index points. In North America, consumer confidence reached 88 index points, while Europe lagged behind as the least confident region at 79 index points.

European Debt Crisis Renews Uncertainty
While the pace of economic recovery accelerated in most Asian and Latin American markets, the spreading debt crisis in Europe resulted in consumer confidence reversing in most European markets. Consumer confidence fell in three out of the five biggest economies as European consumers came to grips with the extent of the debt crisis.

In Italy, consumer confidence retreated to its lowest level (71 index points) since Q1 2009 when it hit an all time low of 70 index points at the height of the global recession. “There is strong evidence of a W-shaped recovery for Italy as consumer confidence in Q2 reversed back into recessionary sentiment,” said Stefano Galli, Managing Director, Nielsen Italy. “High unemployment, economic stagnation and massive public spending cuts have caused consumers to further cut back on their discretionary spending and lifestyles. Budget-conscious Italians are continuing to turn to discounter shopping channels and private labels despite fast-moving consumer goods retailers and manufacturers intensifying promotions. We expect to see some signs of recovery starting from the second half of 2010.”

The economic situation in Spain is especially restrained, which is indicative of the 10 point index drop. With the highest unemployment in Europe (20 percent) and a reduction of government employees, Nielsen experts estimate the possibility of economic growth will move further out to 2012.

However, Germany—the region’s largest economy—posted a welcomed rebound with an increase of seven index points up to 81 from 74 index points in Q1, the highest increase in the region. In the second quarter, newly confident Germans began to open their wallets again and were among the world’s top 10 discretionary spenders on clothes and out-of-home entertainment. In fact, the German job market showed a rather robust upward trend and possible sign that consumers now believe that the worst has passed.

Struggling Baltic nations of Lithuania and Latvia both posted consumer confidence increases of six points each in Q2, although both remain among the most pessimistic nations in the world with low consumer confidence index scores of 52 and 56 respectively. “After two years of a deep economic recession in the Baltic countries, local financial institutions are forecasting a slow recovery at the end of 2010,” said Arturas Urbonavicius, Managing Director, Nielsen Baltics.

Brighter Asian and Latin American Prospects
Six out of the top 10 most optimistic nations in the second quarter came from Asia and all these markets posted consumer confidence increases quarter-on-quarter. Vietnam recorded the highest consumer confidence increase in Q2 soaring 18 index points to 119, while Singapore (which recorded the highest consumer confidence increase in Q1), posted another solid five index point gain from 107 in Q1 to 112 points in Q2.

“The enormous rise in optimism seen in the latest survey has taken ‘cautious’ out of Vietnam’s previous footing of ‘cautious optimism’,” said Darin Williams, Managing Director, Nielsen Vietnam “Vietnamese consumers are ready to spend, with new technology being the focus for many after they have paid for essential living expenses.”

Forty-seven percent of respondents in Vietnam stated they would spend excess cash on new technology—the highest percentage in Asia; 39 percent stated they would spend spare cash on new clothes—a huge jump from 23 percent in the last survey. In Q1, only 16 percent of Vietnamese stated they would invest their excess cash, this has increased to 31 percent in Q2.

“Financial product awareness and intent to use is also rising dramatically as banks and insurance companies have increased their advertising and Vietnamese have more spare cash on their hands,” Williams added.

“In Singapore, there is a significant drop in the percentage of people who think they are in a recession—just 17 percent in Q2 versus 28 percent in Q1,” said Joan Koh, Managing Director, Nielsen Singapore. “Almost one in two feels that now is a good time to buy things. After putting spare cash into savings, Singaporeans will spend on holidays, invest in shares of stocks/mutual funds, new clothes and pay off debts.”

Prospects also look brighter in the Philippines (113 index points), China (109 index points), and Columbia (105 index points), which all recorded consumer confidence highs in their respective markets. “After five quarters of continuous consumer confidence increases in China, the one point increase in Q2 represents steady growth coming from consumers in rural villages,” said Chris Morley, Managing Director, The Nielsen Company China.

Economic recovery and consumer confidence also accelerated in Mexico, which posted a consumer confidence increase of five index points compared to the first quarter of the year. “While positive shopping basket trends in Mexico and Colombia show a slow reactivation in consumption, the population is still concerned about economic and job prospects,” said Felipe Urdaneta, Managing Director, Nielsen Colombia.

Denmark (+5), Switzerland (+5), South Africa (+4) and the Netherlands (+3) also posted consumer confidence increases. For Denmark, the rise is a welcomed change for a country that has shown a steady decline, although the Danish market continues to be volatile and vulnerable. Switzerland’s own currency removes them from the Euro crisis and the Swiss are now ready to spend on postponed investments, apparel, travel and electronics.

Download Nielsen Global Consumer Confidence Index

New research from The Nielsen Company reveals that the profile of the Australian shopper is rapidly evolving and retailers and manufacturers in the Australian retail trade will need to develop strategies that accommodate growing ethnicity, population increases and an aging society in order to succeed in the future.

The results from Nielsen’s 2010 “ShopperTrends Report-The Future of Retailing” revealed that migration from Asia is gathering pace. In 2006, 7% of the population was born in Asia, and based on current migration trends, their representation could increase to 21% by 2050. This has a huge impact on Australian eating habits with Nielsen research showing that Thai cuisine is already the second most popular type of cuisine eaten out of the home (behind traditional Australian) among Aussie households, followed by Italian, Chinese and Japanese cuisine.

Opportunities Abound
Furthermore, the penetration of Asian food items in Australian family pantries has grown by 2% (equivalent to an additional 268,000 households) since 2007; representing a major opportunity for grocery manufacturers and retailers to provide simple and convenient Asian meal solutions as this cuisine evolves to become a staple among Australian households.

From a supplier and retailer point of view, it is critical that we understand how ethnicity impacts how people shop. Even more important is to understand how this trend will impact the demand for products and how we maximize the opportunities these trends will present to the trade in the future. Over the past 50 years, Australian households have been adopting Mediterranean cuisine as part of their everyday menu. However, as Asian migration continues to grow over the next few decades, this will impact what we eat, how we shop and what we buy.

Successful Retailing
The absorption of Asian dishes will happen more quickly if retailers and manufacturers understand how current and new Aussies think about cooking. The Australian retailing giant Coles has already made successful inroads in its quest to encourage consumers to cook exciting meals in the home using supermarket ingredients. Coles’ “Feed your Family for under $10” campaign with celebrity chef Curtis Stone has been hugely successful and has resulted in dramatic sales lifts of various cooking ingredients.

Coles has seen dramatic surges in sales of ingredients ranging from diced pork, rib roasts, salmon fillets and spices, as featured in the Curtis Stone recipes. Consumers are clearly interested in cooking exciting meals at home. Coles has responded to this trend by providing an outlet where they can easily purchase quality ingredients and a little extra help to make inspirational dishes with simple recipes.