Thirteen of the 21 countries have seen volumes decreasing with only Belgium, Norway and Turkey posting healthy volume growths. Growth is still generated in the main by price inflation: UK, Finland, Hungary, Denmark, Portugal, Sweden, Czech Republic and Italy completely rely on price to produce any growth.

For more country-by-country insight and a look at consumer confidence, download Nielsen’s European Growth Reporter Q3 2011.

“Third quarter was volatile and challenging for global economies and financial markets amid stagnant U.S. unemployment figures and a worsening euro zone debt crisis,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of Nielsen. “A recessionary mindset is growing among consumers as more than half say they are currently in a recession—up four percentage points from last quarter and seven points from the start of the year. The result is continued spending restraint for discretionary expenses, which is expected to continue into the next year.”

The survey tracks consumer confidence, major concerns and spending intentions among consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. U.S. consumer confidence dropped one point to an index of 77. Consumer confidence also fell by one point last quarter in China from 105 to 104 and one point in Germany, Europe’s largest economy.

Economic and job security concerns mount
In the latest round of the survey, conducted between August 30 and September 16, 2011, the economy re-emerged as the top concern among 18 percent of online consumers around the globe. The economy last topped concerns in Q4 2010, before it was replaced by worries over increasing food prices in the first half of this year. Job security follows close behind for 14 percent of consumers, rising five percentage points from three months ago. Managing a work/life balance, increasing food prices and concerns about health round out the top five most stressful issues for respondents.

“Driven by a stalled job market and uncertainty about the future course of the global economy, concerns over job security and other economic risks rise to new heights in the third quarter in many parts of the world,” said Dr. Bala. In North America, one-in-three are concerned about the economy—up seven points from second quarter and more than one-in-10 (12%) are worried about job security—an increase of five points from three months ago.

In Latin America, concerns over job security (15%) and crime (12%) took a slight edge over the economy (11%). In Middle East/Africa, while job security retained the top spot in this region, the quarter-on-quarter increase is noteworthy—jumping nine points to 20 percent up from 11 percent in second quarter. In Asia Pacific, the economy (18%) and job security (15%) rose eight and seven points, respectively.

For more detail and insight, download Nielsen’s Q3 2011 Consumer Confidence report.

When considering new and flexible retail formats for grocery shopping, specific preferences emerge when it comes to particular online delivery options, according to Nielsen’s 2011 Global Online Survey of more than 25,000 Internet respondents across 51 countries. While more than half (52%) of global online consumers say they are likely to place a grocery order online if it is delivered to their homes, less than one-third feel the same if they are required to pick up the online order curbside (27%) or via a drive-thru window (30%). Interestingly, more consumers—just over one-third (36%)—say they are willing to pick up an online order inside the store.

The online shopping/home delivery option is most embraced by consumers in Asia Pacific, where more than three-quarters (77%) say they are likely to take advantage of this option, which contrasts sharply with one-fifth of North Americans (20%) and one-third (35%) of Europeans. “The main resistance in developed countries in Europe and North America is primarily due to the high volume of grocery stores that are available,” said Jean-Jacques Vandenheede, Director Retailer Industry Insights, Nielsen. “In Asia Pacific, fewer physical stores and a very digital consumer base equal a fertile distribution channel for online.”  About half of respondents in Middle East/Africa (48%) and Latin America (51%) indicated they are likely to shop for groceries online for home delivery.

Using hand-held scanners to record purchases while shopping to avoid waiting on checkout lines was welcomed by half of global online consumers. While interest is again highest among Asia Pacific consumers (60% interested and only 14% unlikely to try it), in each region, more consumers indicated they are likely to try it than not.

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

Reported use of coupons is greatest in North America (65%) and Asia Pacific (55%). The United States (66%), China (67%) and Hong Kong (65%) are the three leading markets for reported coupon use as a way to save money.

“About 80 percent of U.S. households use manufacturer coupons across all retail outlets, which is up slightly from 2009 to 2010,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen. “But coupon usage is concentrated—70 percent of 2010 manufacturer coupon purchases came from just 13 percent of coupon-using households. These coupon enthusiasts are big spenders across the total store and are young, more affluent and have large households.”

“In China, 35 percent of hypermarket sales in key cities are sold on promotion—a stable contribution over the past two years,” said Peter Gale, Managing Director Retail Sales, Nielsen Asia Pacific and Greater China. “In most Asian countries, simple price cut promotions are the main promotional vehicle supported by direct mail leaflets and newspaper advertising.”

While 38 percent of European consumers indicate using coupons to save, there is wide variation within the continent. While at least half of consumers reported coupon use in several western and southern European countries, such as Belgium and Portugal (63%), Greece (55%), France (53%), and Spain (50%), in other markets, particularly in northern and Eastern Europe, coupon use is much less prevalent. “Belgians are the record holders in terms of coupon redemption, but in countries like Germany or the Netherlands, their usage is very marginal,” said Jean-Jacques Vandenheede, Director, Retail Industry Insights, Nielsen Europe. “Many retailers in Europe are rather reluctant towards that practice.”

In Latin America and in Middle East/Africa, reported coupon use is much less common as a saving strategy. Only 25 percent of consumers in Latin America and 18 percent of respondents from Middle Eastern/African markets report using coupons. “In the Middle East, price cuts is the most popular promotional vehicle used by retailers along with volume discounts,” said Bassel Adel, Director Retail Services, Nielsen Middle East, North Africa, Pakistan. “However, consumers are gaining a greater awareness of leaflets, which are driving store visits and prompting retailers to actively advertise promotions in newspapers.”

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

The study shows that while factors relating to value and price are important drivers of where to shop and what to buy, retailers and manufacturers who offer good values—whether through sales and promotions or via larger-sized economy packaging—stand to gain the most from consumers who continue efforts to stretch their money in a tough economy.

The preference for value over lowest prices in retailer choice was found to be true in Asia Pacific, Europe, Latin America, and North America, while slightly more Middle East/Africa respondents preferred lowest overall prices (59%) to good values (54%). Other attributes rated as “highly influential” by more than half of global online consumers were convenient location, great sales/promotions, well-stocked shelves and high-quality fresh produce.

Bigger is Better & Quality is Key
Commodity and raw material costs continue to rise, squeezing profit opportunities for producers and brands. For CPG manufacturers and retailers seeking direction on consumer demand, the study found a clear preference for strategies that increase value—even in the form of more expensive overall package prices.

When given the choice of either purchasing large value packs at a lower price per serving or smaller pack sizes at a lower cost, global online consumers voted 2:1 for the former. Thirty-six percent of global online respondents indicated they would prefer manufacturers to offer larger economy size packages, with lower prices per usage/serving. Half as many respondents (18%) said they would prefer new, smaller-sized packages at lower prices, and only about one-in-ten (12%) would prefer modestly downsized packages at the existing price level.

Roughly one-third of consumers in every region say they would prefer the larger, economy-sized packages, but the sentiment is most pronounced in North America, where 39 percent of consumers indicated a preference for value packs, 20 percent for smaller packages at lower prices, and 11 percent for modestly downsized packages at current prices. “However, in tough economic times and with wide fluctuations in commodity pricing, downsizing has been a successful strategy taken by manufacturers and retailers,” said Todd Hale, SVP Consumer & Shopper Insights, Nielsen. “To remain profitable, retailers and manufacturers have a few choices: raise prices to cover input increases, modify ingredients to make products cost less to produce or downsize.”

Consumers around the world make it clear that quality is not to be compromised. Producing slightly lower quality products, but keeping prices the same is the least favored option among consumers in all regions. Raising prices is also a strategy that consumers do not embrace.

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

The first quarter of 2011 started off slowly, with nominal value rising 2.3 percent across Europe, a slight decrease from the fourth quarter of 2010. Volume contracted in several countries – most notably Greece, which saw a six percent decline, followed by Finland (-5%) and Germany (-4%). Switzerland posted the largest drop in unit value, declining five percent during the quarter. Turkey continued to lead Europe in nominal growth, with a 12.4 percent rise, followed by the Czech Republic (+3.5%) and Slovakia (+3.4%). Once again, inflation accounted for much of the growth in unit value sales. The results posted in Q1 were consistent with those from the past two quarters, and are in-line with consumer confidence levels in the region. Europeans continue to feel extremely tentative about the economies in their countries and are reluctant to spend their extra Euros, Kroners and Pounds.

Country Analysis
Twelve of the 21 nations Nielsen tracks recorded growth, although it ranged from 0.9 percent in Finland to 12.4 percent in Turkey. Among the big five economies, France topped the group with 2.7 percent nominal growth, followed by Spain (+2.4%) and the UK (+2.3%). Italy recoded zero growth, while Germany declined four percent.

The Czech Republic and Slovakia continued to recover after several challenging quarters. Ireland, however, which had shown new signs of life at the end of 2010, posted nominal growth of just 1.2 percent due primarily to rising value growth. Irish consumers continue to be quite pessimistic about the economy, the state of their personal finances and job prospects.

• For more detail, download: Nielsen European Growth Reporter Q1 2011

The U.S. market, which faced six straight quarters of declines in ad spending, has seen a turnaround in 2010. In total, advertisers spent an estimated $54 billion during the first half of 2010. The increase in U.S. advertising reflects a modest improvement in U.S. consumer confidence in the first half of the year, as advertisers look to highlight value deals and increase promotions in the hopes of spurring consumer spending.

However, with confidence still well below pre-recessionary levels, automotive was one of only a few bright spots in the top 10 product category ad spending.

Overall, there was a 3 percent increase in the top 10 product categories, with the largest growth by far seen in automotive (+27%) and auto insurance (+23%). The automotive advertising was driven largely by increased spending by General Motors which was up 73% over 1H09. Ford and Toyota also grew their ad spending by 15% and 22% respectively. An increase of 82% for UAW Health Care Trust contributed to the first half growth in the auto insurance category. All other categories, except department stores (+5%) and restaurants (+2%) showed declines in the first six months of the year.

“Not surprisingly, auto ad spending is closely tied to auto sales given that those sales dollars enable increased marketing expenditures,” said Sallie Hirsch, SVP of Research for Nielsen’s automotive unit. “Last year was abysmal for the auto industry as economic factors drove down sales to very low levels. Now that we’re seeing an improvement in the market and consumers are more willing to open their wallets, car sales have started to rebound and that’s what’s driving the increase in ad spending for 2010.”

Looking at ad spending across media types, U.S. television (network, cable, syndication, spot, Spanish Language network and Spanish Language cable) continues to dominate, accounting for $33.8 billion in advertising during the 1H10, a 6 percent increase over last year. Spanish language network TV and Cable TV in particular saw the biggest gains, up 24 percent and 13 percent respectively over 1H09.

Print media overall (national and local magazines, newspapers, Sunday supplements and B2B) was flat, however, national Sunday supplements received a significant uptick with 21.6 percent growth over last year. National newspapers were also up 10.8 percent. Alternatively, B2B and local Sunday supplements declined 19.2 percent and 12.1 percent respectively.

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Overall, consumers worldwide remained cautious regarding pace and sustainability of the recovery as dollar and unit volume remain near neutral levels (in the -1% to 1% range). A summary of spending trends in 15 key countries is outlined below. The full report, State of the Global Consumer is available for download.

Longer term, with 30 of 31 countries showing positive ad spending in the in the 2nd quarter of 2010, global consumer spending may receive a boost in the back end of 2010 and 2011 as consumers remain focused on promotional activity.

Country-by-Country Consumer Scorecard

United States
Low U.S. consumer confidence is reflected in continued spending restraint as consumers continue to reduce overall shopping trips and spending even with better prices and increased promotion support. Detailed North American Review.

Canada
Consumers are still focused on value, shopping more at discount retailers and buying more on promotion. National brands are a key driver of promotions, which are currently outperforming private label. Detailed North American Review.

France & Spain
Volume and value shares are growing in the 1-4% range. In France, consumers are spending more per trip, but they are not shopping more frequently. The opposite is true in Spain where consumers are shopping more frequently (despite high unemployment rates), but not spending more per trip.

Germany & Italy
Volume and value shares are declining as shoppers are not shopping more frequently and are not spending more per trip.

United Kingdom
Volume shares are neutral, but value shares are up. Shoppers are shifting to value channels to save money.

Austria & Switzerland
Volume and value share show no significant change from three months ago. Store brands and value channels are on the decline, but retail promotions are up.

Brazil
Volume growth continues as items sold grew 4.1% in volume, with an emphasis on beverages, which grew 7.3%, followed by perishables at 6.5%.

Taiwan
Taiwan’s fast-moving consumer goods market remains positive, mainly driven by personal care categories where cosmetics are a leading department with close to 20% growth. In food and beverages, nutritional supplements outperformed the total market.

Hong Kong
Value growth is ahead of volume trends with growth being driven by non-food vs. food categories such as baby products, which continue strong sales.

India
Fast-moving consumer goods growth was revived in Q2 2010, fueled by double digit growth of food categories. Innovations in terms of smaller trial packs coupled with heavy promotions and new application products dominated the market scene. Modern trade channels dominate, which is driven by the market leaders.

China
Consumer confidence in China has now reached a high point (index=109). As such, fast-moving consumer goods sales continue to grow and accelerated consumer spending is reflected across both food and non-food categories.

• Download State of the Global Consumer.

It was the rare household that didn’t change spending habits over the last 18 months. Faced with unemployment (or even the prospect of it), higher expenses and crushing debts, consumers around the globe used a number of tactics to stretch their money further to get the most bang for the buck.

The Nielsen Company conducted an online survey in March 2010 of more than 27,000 consumers in 55 markets from Asia Pacific, Europe, Latin America, North America and the Middle East/Africa (consisting of countries from Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa) to get a better sense of the steps being taken to save money in view of uncertain economic conditions.

What’s more, while recovery has taken hold in some regions (Asia Pacific and Latin America in particular), in other regions it has been tentative. Regardless, one thing remains clear: habits picked up during the recession are likely to survive even after economic recovery is in full-swing.

Value Strategies Help Savvy Consumers Save
In addition to a shift toward private label products, global online survey respondents saved money on household expenses in a number of ways, including:

• Buying items on sale (a 57% global average)
• Using coupons (40%)
• Shopping at value retailers (37%), such as supercenters and dollar stores
• Purchasing value packs (35%)
• Shopping close to home/work (25%)
• Stocking up (22%)
• Switching to cheaper health and beauty products (18%)
• Purchasing smaller packs with a lower unit price (17%)

One in 10 consumers in the online study reported no belt-tightening practices in their household.

North Americans led the world in cost-cutting strategies and adopted a host of budget-shrinking tactics. Seven in ten respondents said they bought items on sale, which is 13% more than the global average. Both Asia Pacific (46%) and North American (59%) consumers indicated they presented coupons at a checkout, outstripping the 40% global average.

In the U.S. in particular, manufacturer coupon redemption hit record highs in 2009 after years of no growth or declining growth. Meanwhile, Canadians continued to shift spending to discount or value retailers—now accounting for over one-third of total grocery sales—as their neighbors to the south have done so over the past several years.  Whether prompted by high gas prices or environmental sensitivity, North American respondents were also the most likely to say they shop in stores close to home or the office.

Value packs and stock-up shopping trips were a popular option across regions, with consumers in Middle East/Africa/Pakistan and Europeans lagging slightly behind the global benchmark. Middle East/Africa/Pakistan consumers also had the lowest incidence of using coupons (11%), shopping on promotion (42%), patronizing value retailers (21%) or stocking up to save (12%). The use of coupons as a promotion tool is not a popular marketing method in the region. Additionally, the dearth of established retailers in the Middle East and Pakistan explains the low incidence of patronage.

Roughly one-quarter of Latin (23%) and North Americans (24%) said they sacrificed beauty at the budget altar by switching to cheaper health and beauty products. Asia Pacific and Middle East/Africa/Pakistan respondents were less likely than average to say they made such a switch to save money (15%).

Cash is King; Dining In Trend Heats Up
Consumers found other ways to cope with the cash crunch as well. While 19% of the regions admitted to using credit cards more often, North America at 10% and Europe at 11% were well off that global average pace. Further supporting the belt-tightening approach, 31% of North Americans and 30% of Latin Americans said they recorded less credit card utilization versus the prior year, while only 20% of Europeans did, despite a precarious economic picture.

Foregoing credit was just one consumer coping mechanism. Based on survey findings, restaurants in some countries must be hungry for clients, as more than half of survey respondents said they ate out of the home less often than the year before. The dine-in trend was particularly strong in Latin America, North America, Europe and the Middle East.

Roughly one-fourth of residents of Indonesia, China, the Philippines, Hong Kong and India indicated that they were eating out more often than usual. Asia Pacific as a whole showed a 5% higher rate for eating out than the global average.

Dining out cutbacks appear to correlate with private label purchase patterns, with five of the top 10 “dining out less often” countries also landing on the top 10 “purchased more private label” list: Greece, Ireland, Spain, Turkey and Portugal—countries that continue to face significant economic challenges even as other parts of the world resume growth.

Note about online survey methodology
While online survey methodology allows for tremendous scale and global reach, it provides the perspectives on the habits of existing Internet users, not total populations. Where noted, the Nielsen Global Online Survey data is supplemented with consumption data by market.

Shoppers around the world took many steps to stretch their budgets during the recession such as eating at home more frequently or cutting back on vacations.  While improving economies may prompt consumers to return to restaurants or take a vacation, one trend that looks likely to remain—and perhaps even grow—is the shift to private label goods.

A 2010 global online survey conducted by The Nielsen Company reveals that 60% of consumers across 55 countries from Asia Pacific, Europe, North America, Latin America and Middle East/Africa (consisting of countries from Saudi Arabia, Pakistan, United Arab Emirates, Egypt and South Africa), say they are stocking cupboards with more store brands as a result of the economic downturn. Across the regions, Latin America led the way at 66% and the Middle East/Africa/Pakistan area trailed at 51%.

The highest levels of private label purchase intent during the economic downturn were reported by consumers in Colombia, Spain, Portugal and Greece at 80%, 79%, 74% and 70% respectively, reflecting recessionary realities, depressed export activity and raging deficits. Meanwhile, the lowest reported drift toward private label came from consumers in Sweden (70%), Thailand (62%), Hong Kong (60%) and Denmark (59%) who indicated they did not purchase more store brands during the recession.

While econometric pressures are driving many value-oriented consumer shopping decisions, it is just one factor influencing private label purchasing. A strong push from retailers and improvements in both quality and selection are contributing factors. It should also be noted that not all private label categories are alike. Store brand share varies widely by category and they still represent the minority stake when compared to premium brands.

Store brand share is typically strongest in commodity categories like milk, fresh eggs, rice, edible oil, vinegar and sugar/substitutes or in those with little differentiation (first aid and wrapping materials). Store brand share is usually the lowest among categories where there is strong marketing support for top brands (e.g., candy, gum, beer) and those where a high-level of innovation occurs (e.g., detergents, deodorant, cosmetics).

Staying Power
Fully 88% of shoppers globally said they intend to keep buying private label even after the economy improves, suggesting that store brand quality has reached parity with national brands and delivers on consumer expectations. While Latin American and Middle East/Africa levels were slightly less than the global average at 83% and 79% respectively, the overwhelming majority still intended to pursue a value strategy.

Countries with the most value-conscious consumers on the private label dimension included Austria, Germany and Sweden, all registering a better than 95% intent to continue purchasing private label, while more than one-quarter of shoppers in the Ukraine (31%), Pakistan (28%), the United Arab Emirates (27%) and Venezuela (27%) had no intention to buy private label in the future.

The economic downturn prompted many consumers to try private label goods for the first time, and once they did so, they discovered that not only was the pricing right, but the quality of the goods met or exceeded expectations. Regardless of the pace of economic recovery, retailers continue to have a tremendous opportunity to convert shoppers to private label for the long term.

Regional Round-Up

Asia Pacific
In most Asian markets, private label is still relatively undeveloped with only Hong Kong having a share above 5% overall. There has been significant investment by many leading retail chains into launching new private label products over the last five years and they are gaining acceptance particularly in the basic commodity categories. In these categories, such as cooking oil, rice, bathroom tissue, market shares can reach up to between 20% and 30% in some countries.

Asian consumers are still largely brand loyal and retailers will need to increase their private label marketing support to build consumer trust in their own brands. During the economic downturn in 2009, there was strong private label growth in many countries. For example, in Thailand, private label grew by over 25%, as shoppers increasingly looked for value when buying grocery products.

In the Pacific markets of Australia and New Zealand, private label is much more established with the majority of households regularly purchasing private label products, which account for up to one-quarter of all supermarket sales.

Latin America
Private label continues to have a stable presence in the region. In Chile, store brands represent 8.4% of the market as of April 2010. Market share remained relatively flat in Argentina and Mexico, reporting shares of 7.6% and 6.6% respectively during the rolling year ending April 2010. While Mexico’s private label market share was flat, sales grew 23% compared with the previous period (April 2009). Store brands in Brazil have 4.9% of importance (YTD April 2010).

The categories where private label market share are strongest varies dramatically by country. In Argentina, the top five categories are dominated by foods such as fish, pasta, ice cream and vegetables, while in Chile, four out of the top five are non-food categories (clothes hooks, candles, pots/pans and cotton swabs). In Mexico, sugar and pies hold the greatest market share, but disposable plates, glasses and place settings round out the top five.

Europe
Private label continues to show solid performance in most European nations, with Switzerland, the United Kingdom and Germany leading the way reporting 2009 store brand value shares of 46%, 43% and 32% respectively. While year-over-year growth was relatively flat or minimal, Turkey and Spain boasted the biggest year-over-year increases of 2.7% and 2.5% respectively.

North America
Private label has taken off in the U.S. For year ending July 2010, store brand unit sales reached an average 22% share across all departments, with share gains in all but dairy. Store brand unit shares range from a high of 40% in the dairy department to a low of less than 1% in alcoholic beverages.

In Canada, private label represented $11.4 billion in national sales for year ending July 2010, which is 18.3% of overall consumer packaged goods spend. Over the past year, private label share has declined slightly with overall dollar sales flat, while the total market increased +3%.

Middle East
Middle Eastern consumption patterns often run counter to the West for a variety of reasons, and respondents in the region indicated the least likelihood of purchasing private label today or after economic recovery. However, as awareness has increased over the last few years, volume is growing—albeit from a very small base. While only 18% of shoppers in the United Arab Emirates perceive private label as a better value for the money, certain categories such as household cleaners are regarded more favorably. Fully, one-fourth (26%) of shoppers in Saudi Arabia consider these store brands as worthy.

Note about online survey methodology
While online survey methodology allows for tremendous scale and global reach, it provides the perspectives on the habits of existing Internet users, not total populations. Where noted, the Nielsen Global Online Survey data is supplemented with measurement of private label consumption by market.