Fourth of July Hot Dogs: The Latest Economic Indicator?

The effects of the recession may be seen on the BBQ grill this Fourth of July. Sales of hot dogs have been going up in recent months while register rings for more expensive bratwurst and knockwurst have been declining, according to new research from The Nielsen Company. This is a reversal of sales trends the past several years.

July 3rd traditionally has the highest sales volume for all three types of meat. Consumers were 50 percent more likely to buy hot dogs during the four-week period ending on July 12, 2008 than any other time over the year. The trend is even more pronounced for bratwurst and knockwurst last year, with consumers 106 percent more likely to buy the thicker sausages during the same period. Continue Reading This Post »

Consumer or Consumed? The Economy Hits Home

Recently, at Nielsen’s Consumer 360 Conference, The Nielsen Company featured a unique exhibit, Consumed: The Economy Hits Home, which looks at how today’s uncertain economy is shaping consumer attitudes and behaviors and how marketers can navigate this new landscape to uncover growth opportunities. Mark Leiter, President, Professional Services, provides a guided video tour.

Read the corresponding presentation: Consumer or Consumed.

More video and presentations available at Consumer360.com.

Travel Ad Spending Takes Flight in 2008

As most top industries cut their ad budgets in 2008, the travel and hospitality industry saw its ad spend increase four percent, according to an analysis by The Nielsen Company. The industry spent $3.9 billion in total advertising across 16 media last year.

“In a year where ad spending declined across the board, it’s refreshing to see travel and hospitality companies were expanding their reach to consumers,” said Annie Touliatos, VP for Sales Development at Monitor-Plus, Nielsen’s ad tracking service. “It shows the confidence they have that Americans are still looking to travel even in this down economy.”

Southwest Airlines led all advertisers in the industry with $191.6 million in ad expenditures in 2008 - 20 percent more than its total spend in 2007. Intercontinental Hotels - the parent company for Holiday Inn hotels - showed the largest growth among the top ten advertisers, upping its ad budget 29 percent to a toatal of $80.3 million.

Hotels and Resorts spent more than any other product category within the industry. Its $1.4 billion in ad buys represented almost 40 percent of the total industry’s advertising.

Download Nielsen’s full Hospitality and Travel Spotlight.

Despite Drop, UAE Consumers Still Confident

Consumer confidence around the world has been falling as the ongoing recession is causing more people to worry about their jobs and cut household spending.  And although residents of the United Arab Emirates share those concerns, they rank in the top ten of the most optimistic countries of the 52 studied by Nielsen.  The UAE scored a confidence level of 89, compared with other regional neighbors such as Saudi Arabia (79) and Egypt (74).  Globally, Indonesian consumers were the most confident, with a score of 104, followed by the Danes (102) and Indians (99).

“Job security is the biggest concern for UAE consumers.  However, despite uncertainty levels tripling over the last six months, we are still among the top 10 countries with a comparatively higher perception of local job prospects.  More than one in three UAE consumers perceives their prospects as good or excellent over the next 12 months,” said Piyush Mathur, regional managing director, Middle East, North Africa and Pakistan at Nielsen.

In comparison, about a quarter of global consumers described their job prospects as bad in the coming year, with Latvians being particularly pessimistic - 78 percent responded negatively.

“Job concerns reflect in consumer spending habits.  For instance, consumers in the UAE are now tending to keep their spare cash in savings and using it to pay off their debts.  They are controlling discretionary spending, especially on clothing, entertainment outside the home and technology upgrades,” said Mathur.

Consumer Spending Uptick Shows ‘Green Shoots’ of Economic Recovery

Global consumer spending appears to be on the rebound, driven by sales gains in China, India, the U.S. and Canada in April, another indication that the global economy may be stabilizing as consumer attitudes and confidence turn up. For the first time in four months, since the creation of the Nielsen Economic Current (NEC) scorecard of consumer behavior, a monthly report from The Nielsen Company, none of 10 major GDP countries showed declines in consumer activity compared to the previous month.

“Although consumers are still not shopping as frequently, we are seeing a turnaround in spending as shoppers spend more money per trip,” said James Russo, Vice President, Global Consumer Insights for The Nielsen Company. “There continues to be the emergence of optimism worldwide, and this upward trend in spending across four leading economies is further evidence that the ‘green shoots’ of economic recovery are finally breaking through. We expect to see even more forward momentum as we look to the second half of 2009.”

Continue Reading This Post »

New Zealand Feeling Financial Crisis Fatigue

In a poll that surveyed more than 25,000 people worldwide, Nielsen found that New Zealanders were among those getting most bored of media coverage regarding the global recession, with more than a quarter of Kiwis polled saying that there was too much coverage.

Although 40 percent said that the media did a poor job of informing them of the issues that led to the crisis, 52 percent say that the media is now helping them to better understand the issues at play while 23 percent said that they were let down by the media.  Another 25 percent were ambivalent.  A similar number (53%) thought that they were getting good information from the media about the steps governments were taking to address the economy, while 20 percent thought that more information was needed.

The views of New Zealanders largely echoed those of others in the Asia Pacific region, which were generally less critical of the media than Europeans and Americans.  In North America, 51 percent of those surveyed said that media coverage leading up to the crisis was inadequate, while 48 percent of Europeans thought the same.  The Swiss were the most fatigued by media coverage - 42 percent were tired of reading about gloom and doom - followed by the Dutch (41%) and the Irish (38%).

How U.S. Consumers Are Reacting to the “Great Recession”

Todd Hale, Senior Vice President, Consumer and Shopper Insights

For those of you who attended our 2009 Consumer 360 client conference, you heard the opening remarks from John Lewis, President & CEO, Nielsen Consumer North America, on the impact of the economy on our industry.  His message was about how our company is “investing considerable resources in the area of thought leadership to mine Nielsen content to understand what will happen tomorrow; where (our economy) will settle; and what will the new paradigm look like?”

When John looks at the economy he sees “consumers under profound pressure in every way and there are so many changes going on” and asked the audience “what is changing versus what isn’t changing so we don’t overlook or miss some obvious opportunities”?

I wanted to share some of John’s messaging and embellish it with some of my own observations.  As John mentioned, Nielsen research shows that only 5% of U.S. households are in “panic mode” and doing just about everything they can to modify where they shop, what they buy, and how they consume products to make it through these tough times.  The remaining 95% of consumers have modified some of their behaviors too, but these folks have been “very much in the game” for marketers to pursue.

Continue Reading This Post »

Telecom Case Study: All You Can Eat Plans Take a Bite out of Vegas

Sid Gorham, President, Telecom Practice

Pressure has been mounting on U.S. mobile carriers to lower pricing in response to slow growth and the weakened economy. The Big 4 national carriers (Verizon Wireless, AT&T, Sprint and T-Mobile) each introduced unlimited usage plans in Q1 2008 that offered unlimited calling for approximately $99 per month. While these plans lowered rates for high usage subscribers, they failed to spark a full-on price war in the mass market as many analysts predicted at the time.

Today, the Big 4 national carriers are increasingly challenged by regional carriers that exclusively sell unlimited plans. These “All You Can Eat” (AYCE) carriers offer unlimited service in the $40-$50 per month range. Their services lack many of the capabilities of the Big 4’s offerings, but for budget-challenged consumers who don’t travel frequently, they are an attractive option.

Continue Reading This Post »

Consumers Cautiously Ready to Spend Again

First signs of how consumers will behave post recession.

Restraint will be the new mantra among consumers, according to the Nielsen Global Consumer Confidence Survey. But, that doesn’t mean they won’t start spending again in the near future.

Respondents to the poll conducted in April, across 50 countries making up 86 percent of the GDP, said they would continue to focus on fiscal responsibility. Yet, “they will allow themselves some of those little indulgences,” said James Russo, vice president, Global Consumer Insights. “Perhaps pent up demand will play itself out and they’ll take that vacation they put off, go back to casual dining and increase out of home entertainment activities such as movie going.”

In April, 56 percent of consumers said they were spending less on new clothes. However, only 22 percent said they would continue to do so with an economic recovery predicted by year’s end.

Continue Reading This Post »

Americans Taking Small Steps in Household Energy Efficiency

Consumers are open to making energy-saving lifestyle changes. But, they are still far from becoming active managers of their household energy use, per new research from Nielsen Claritas. The annual Convergence Audit drew on data from more than 32,000 respondents replying both online and through the mail about their energy behavior.

While consumers are generally on board with energy conscious products, their green behavior has yet to extend to their habits in monitoring and paying for the energy in their homes.

Services offered by local utilities such as whole house energy audits, energy efficient HVAC rebates and weatherization services were only used by 2 percent of respondents in the past year. Energy efficient appliance rebates were used by 4 percent.

Similarly, online energy services, such as real-time pricing, load management, and service consumption monitoring were adopted by only 3 to 5 percent of consumers in the past year.

With the energy industry poised for major changes, including a heavier reliance on technology in monitoring and delivery, the report emphasizes that energy providers have major opportunities if they can educate their customers to become more active in their energy use.

Respondents showed a continued interest in energy-efficient equipment in the home, with 25 percent of consumers having purchased an Energy Star certified appliance, lighting product, or heating or cooling equipment in the last year. However this percentage fell from 27 percent last year.

Energy conserving compact fluorescent light bulbs (CFLs) have shown strong adoption with 71 percent of consumers using at least one bulb in their homes. Nearly a third (30 percent) of those surveyed said they are using more than six.

One indicator that going green is not just a trend for younger consumers is that CFL use appears to increase with age. While 64 percent of those aged 18 to 34 are using the bulbs, so are 70 percent of adults 35-54 and 74 percent of consumers 55 and older.

Ownership of CFLs is highest among those with higher income and education levels, with 76 percent use among those making over $100,000 a year.

Download the complete Convergence Audit.