The Global Consumer Confidence Survey, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 online consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. Consumer confidence fell globally from 89 to 88, down for the seventh consecutive quarter. “We’ve been on a roller-coaster ride, with a lot of ups and downs and screaming along the way and the ride is not over yet,” said Carman Allison, director of consumer insights, Nielsen. “We’re about to hit another turn.”

Employment is Up – But So is Pessimism
A key component of national confidence is how Canadians perceive the job market. Fifty four percent rated job prospects as good or excellent, better than the global average (43%), but down from 58 percent in Q2 of 2011. Canadians also continue to grow more negative about how they view their personal finances. Globally, 51 percent of respondents felt good or excellent about the state of their finances over the next 12 months. That’s up one percent from the Q2 survey. Yet Canada trends in the opposite direction, with 54 percent of Canadian respondents rating their finances as good or excellent, down from 61 percent just three months earlier. “Canadians may be feeling more optimistic than the global average, amidst some positive economic trends in this country over the past year. Yet a combination of recent factors, such as rising prices of goods, stock market turbulence and bad economic news from the U.S. and Europe, are affecting consumer confidence,” noted Allison.

Discretionary Spending Flat
When asked what they are doing with spare cash, 37 percent of Canadians said they direct spare cash to paying off debts and another 30 percent pour it into savings. “Households are showing increasing fiscal responsibility. Spending is also hampered by this new reality; almost one-quarter of consumers (23%) report that no spending money remains after they’ve paid for the essentials,” Allison said.

• For more insights, download Consumer Confidence: A Canadian Perspective – 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.

“Global recovery, despite its slow pace, is heading in the right direction,” said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company. “Still, more than half (55%) of global online consumers say they are currently in a recession, and of those, 51 percent expect to be in a recession for at least another year.”

Key Takeaways From the Q1 Report

• Asia Pacific and Middle East/Africa regions reach highest confidence levels on record
• North America rises two index points
• Southern and Easter European countries dip to new lows
• Increasing food prices trump the economy as the biggest global concern
• Rising fuel/utility prices impact spending intentions
• Regional differences prevail, with 37 percent of Asia Pacific consumers saying they are in a recession today compared with 82 percent of North Americans and 68 percent of Europeans

The Nielsen Global Online Consumer Confidence Survey tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 51 countries. In the latest round of the survey, conducted between March 23 and April 12, 2011, the number of global online consumers saying they are in a recession has receded across all regions.

Download the full Q1 Global Consumer Confidence Report

“Yuppie couples are educated, well-employed and represent the next generation of Indonesia’s affluent consumers,” said Suryanata.  “But retailers and consumer products manufacturers need to know how to specifically appeal to them if they want a greater share of their Rupiah.”

So what exactly makes a “yuppie couple?” They are young – below 30 – and have university or higher education.  They reside in an apartment or a middle-up housing complex located in the city or suburbs.  They work as professionals, typically at the managerial level, in fields such as banking and finance, energy, consulting or marketing, and are focused on their careers.

They live by the motto “work hard, play hard,” and like to socialize with colleagues in cafes, restaurants, bars or at mall.  They also like to reward themselves with expensive fashion brands or with trendy electronic gadgets as a way to compensate themselves for their hard work, their career achievement and their busy life.

In short, yuppie couples believe hard work to be personally meaningful, emotionally satisfying, and a vehicle for self-expression. Nicknamed “DINKs” (Dual Incomes, No Kids) in the West, yuppie couples have postponed having children for the sake of their careers, and have discretionary income which they can use for future investment.

The role of women is important within yuppie couples: the female spouse has the right to express her opinion and her own preferences. In the long run each spouse will develop a mutual taste since they influence each other.

The following facts illustrate the economic power of the yuppie couple:

• 19 percent read newspapers and 67 percent access news online.
• 15 percent traveled overseas in the past two years and most go to Bali at least once every two years for vacation.
• Visit a mall twice a week and spend an average of Rp. 120,000 for food during their visit.
• 88 percent own microwaves.
• 100 percent own refrigerators, air conditioners and washing machines.
• 63 percent own cars, with penetration even higher among those living in suburbia.
• 100 percent cellular phone penetration, with 50 percent using more than one handset; monthly spending for each phone averages Rp. 127,000.
• 84 percent own a PC.

“When deciding what to buy, yuppie couples place the greatest importance on the quality of the product, recommendations of friends, online reviews, as well as influencing each other,” noted Suryanata.

Various Nielsen studies have yielded critical insight in how to market to this segment:

1. Quality is paramount
   Yuppie consumers appreciate hard-work and they have a high expectation on quality of a product or a service. However, the real challenge is their sensitivity to the image of a product or a service. If a product or service fails to deliver or perform well, the yuppie couple will never use those products or services again – and they do not hesitate to let their friends, colleagues and family know about their disappointing experiences.
2. Willing to pay a bit extra for convenience
   Yuppie couples tend to value their time since they have a busy lifestyle.  As a result, they are willing to pay a bit extra for conveniences such as valet parking services, online reservations and special VIP counters at a service center, to name a few examples.
3. Are modern and liberal
   Yuppie Couples are not conservative. They like the concept of a modern family where each spouse still has privacy for “Me Time” where he or she can do his or her hobbies, activities or vacation with friends or colleagues without the presence of their spouse. However, they are expected to conduct their “Me Time” responsibly.
4. Like brands with “his & her” designs
   They love to be seen as a perfect couple and sometimes have a need to convey this message to the world.  One way they can do this is by wearing a matching fashion items.  Or they use gadgets from one brand only with a different color and design (his & her design).
5. Online marketing is effective in reaching them
   They have such a desire to succeed, hence spend much of their life at work which often requires a lot of time online and exposure to advertising there.
6. They are business savvy, and require credible, convincing communications
   Communicate your product or service message with realistic explanations. Do not over promise and under deliver.  Establish a professional customer service center that is tactful and focused on problem solving. Give consumers the freedom to decide and choose. Listen and understand them, but don’t teach them.
7. They stay atop contemporary trends
   Stay tuned to the latest trends such as healthy living, organic food, generosity, dynamic discounts, exotic destinations, smartphones, and the concept of sharing and staying connected.

“The yuppie couple is in many ways the consumer product industry’s ideal customer.  They have discretionary income to spend, and they are eager to do so.  But they are discerning consumers, and marketers need to know precisely how to reach them.  These seven principles provide a solid framework around which marketing campaigns towards yuppie couples can succeed,” concluded Suryanata.

Three-quarters of people questioned in the quarterly survey – which asks people their thoughts and feelings on job prospects, personal finances, major concerns and spending intentions – said that job prospects in the country will be ‘not so good’ (48%) or ‘bad’ (26%) over the coming year. That compares with 20 percent who felt they would be ‘bad’ in the Q2 survey.

Also contributing to the drop in the confidence index is a worsening of sentiment over personal finances. There has been a six percentage point increase in the number of people who believe that prospects for their own personal finances are ‘not so good,’ with 48 percent of people believing this now compared with 42 percent in Q2 and a further 13 percent now believing that their own personal finances are ‘bad.’

When looking at major concerns, ‘the economy’ remains the nation’s biggest concern though this has eased somewhat. In Q2, 39 percent of people cited ‘the economy’ as either their first or second biggest concern. This has now fallen to 26 percent as people’s worries turn from the economy in general to their own ability to cope with the economic climate. Since the Q2 survey, there has been a significant rise in the number of people who are concerned about increasing utility bills (from 15% to 23%), food prices (from 12% to 20%) and debt (from 19% to 20%). The burden of personal debt continues to weigh heavy with one in five citing this as a major concern.

“This survey has told us that consumers are clearly concerned about inflation on petrol, utility bills and food shopping bills, underpinned by a sustained and increasing worry over jobs,” noted Chris Morley, Group Managing Director, Nielsen U.K. & Ireland. “The levels and depth of promotions in the grocery sector remains at an all time high and taking advantage of these offers is just one way that shoppers are making savings. We expect similar tactics to be employed on the high street to help drive seasonal spending and we watch with interest to see if this will release some pressure on consumer confidence leading up to Christmas.”

British Retail Consortium Director General Stephen Robertson added: “Consumer confidence is now down to its lowest for a year and these results suggest prospects for the early part of next year are fragile. People’s fears about their job prospects for 2011 are the main cause. Despite tentative indicators of recovery, four out of five people still think we’re in recession and more than half believe that won’t have changed by this time next year. With spare cash short and cutting back rising up the household agenda, a strong revival in consumer confidence is likely to be some way off.”

Other findings from the survey include:

• The global Consumer Confidence Index stands at 90 so sentiment in Great Britain lags significantly behind the average – Out of 53 countries polled, British confidence ranked 38th.
• 84 percent of people think that the country is still in recession and only 20 percent believe we will be out of it within the next year.
• When asked what they spend spare cash on, 26 per cent of people claimed they have ‘no spare cash.’
• More people say they are trying to save on household expenses than did in Q2. 70 percent now say they are budgeting in this way compared to 63 per cent in May.
• The most popular strategies people are employing to cut back on household expenses are ‘trying to save on gas and electricity’ (65%), ’switch to cheaper grocery brands’ (60%), cut ‘down on takeaways’ (60%), ’spend less on new clothes’ (59%).
• Once the economy has improved, 56 percent of people say they intend to continue try to save on gas and electricity, 39 percent on takeaways and 31 percent intend to continue trying to spend less on grocery.

Loan Supply Up – Demand Down
Interestingly, the stalled economy is not due to a lack of available credit. A review of the ISI Bank Loan Survey, that analyzes the lending practices of large national and regional banks, shows a wide gap between the willingness of banks to loan versus actual lending activity (indicative of consumer interest or ability to take on loans or more dept). The survey includes mortgage, credit card and auto lending practices. In the chart below, the axis on the left is tied to the survey and is simply a 0=weak to 100=strong scale.

The axis on the right represents the Federal Reserve’s Senior Loan Officer Survey. The numbers represent the percentage of banks more willing to make consumer loans net of the percentage less willing to make consumer loans. This would be for credit card and all sorts of installment credit.

The takeaway from this chart is that until this gap closed, the recovery will not gain momentum. Confidence drives credit, and credit drives capitalism and spending.

Out-of-Work
Unfortunately, finding a loan may be easier than finding a job. July’s unemployment rate was 9.5%, but when you factor in “underutilized” people that are not working full-time, but would like to be, the rate stands at almost 16.5%—1 in 6. The percent of unemployed longer than 27 weeks is at an alarming 45%. Job losses are not anywhere near as bad as the days when we were losing over 500K+ jobs per month; but the economy needs be creating 200-250K jobs per month to take a solid bite out of the ranks of the unemployed.

At this rate, expectations that a return to normal will either not be achievable or will not occur until well into the current decade. Without a consistent level of job growth, spending will be restrained and confidence subdued.

Value is Here to Stay
The “Great Recession” drove fundamental shifts in consumer shopping and buying behavior. For many consumers, their own personal recession goes on as they continue to look for value. They have replaced pre-recession auto-pilot buying with decisions now based on trade-offs. In the latest year, Nielsen reports impressive double-digit dollar growth for the fastest growing 15 store brand categories versus single-digit growth for 14 of the fastest growing branded categories. In fact, from 2007 through 2009 and year-to-date 2010, store brand dollar share grew across all categories tracked by Nielsen. Store brands are now growing share from lead brands as well as smaller brands.

With increased promotion support from brands, store brand share growth has slowed in recent months, but it has reached a new share plateau from which to launch future growth. Store brand success will continue and will be a risk for mid-tier brands as retailers look to make room for expanded store brands and seek to eliminate in-store clutter and simplify the shopping experience. Manufacturers need to aggressively defend their space and consider store brand manufacturing or direct-to-consumer options. Premium and discretionary brand segments and retailers will need to innovate and work harder than ever to differentiate. Best-in-class retailers and manufacturers will combine new media and digital platforms with traditional methods to directly reach consumers just prior to or at the point of purchase.

As we come to the end of government stimulus programs, the U.S. economy has a long way to go to build jobs, consumer confidence and consumer spending.  With financial systems stabilizing, retailers and manufacturers need to be sure they are doing all they can to provide more value and confidence to consumers, as those consumers will ultimately be the ones leading the U.S. out of its economic slump.

SUMMARY: The European Union is a mega market with an economy larger than the United States. While Nielsen reports consumer confidence in the U.S. today is higher than in Europe, spending intentions tell a different story. The International Monetary Fund data shows that while the U.S. is initially experiencing a faster and stronger recovery from the current recession, the entire EU will move past the U.S. in growth by 2014.

Twenty years ago, the government of East Germany announced that travel restrictions between the east and west would be lifted. Over the next several weeks, sections of the Berlin wall were torn down, placing Germany on the path to a reunification made formal barely a year later in October of 1990. The fall of the wall and the subsequent division of the USSR has propelled the European Union (EU) from its original six members in 1957 to 27 today.

The EU is now a mega market with nearly 500 million inhabitants and an economy larger than the United States. Data from the Boston Consulting Group show that the new Europe has passed the U.S. in wealth and its GDP is nearly as large as the U.S. and China combined.

Growing consumer confidence
Latest findings from Nielsen’s Global Consumer Confidence Survey reveal that U.S. confidence today is higher than in Europe overall. And while Europe is more united today than ever in its history, there are still strong economic divisions within the EU and the European continent.

The latest International Monetary Fund (IMF) data show that while the U.S. is initially experiencing a faster and stronger recovery from the current recession, it also shows the entire EU moving past the U.S. in growth by 2014. For the sixteen Euro-based countries in the Eurozone, this translates to a per-capita growth rate more than twice what is expected in the U.S. Partially, this advantage comes from a lower level of government deficits. Government debt in the U.S. will likely reach 94% of GDP while the same measure for the EU will be around 79%.

Optimistic European outlook
Aligning with IMF projections, Nielsen reports that while 91% of Americans said that the U.S. was in a recession, only 85% of Europeans agreed. Northern Europeans in Finland, Norway and Sweden were the most bullish with only 61% agreeing that they were in a recession. This gap between Northern Europe and the rest of Europe appears throughout the consumer survey data. Northern Europeans are the most upbeat about the economy and the future followed by Western Europe and then by Eastern Europe.

Interestingly, despite IMF projections, Americans were much more confident about what the future might hold compared to Western or Eastern Europeans. Half of Americans think their personal finances will be Good or Excellent in the next year, whereas only about 40% of Eastern/Western Europeans believe the same. Northern Europeans are the exception, with over 60% thinking things were looking up for their personal finances. The U.S. and Northern Europe also agree about job prospects, while Eastern Europeans don’t see much relief on the horizon.

Spending intentions
Perhaps the reason economic projections post-recession favor Europe a bit over the United States is because there are stark spending differences between the two countries. While Europeans are much more likely to spend spare cash in the marketplace on clothes, entertainment, technology and vacations, Americans are much more likely to put their extra cash into the equity markets or to pay down their existing debt. More than one quarter of Americans (26%) reported that they simply do not have spare cash to spend—a level 56% higher than in Europe.

The recession has caused everyone to cut back on spending. But Europeans and Americans have cut back on different things as seen in the table below. Consumers in both countries have cut back spending similarly on vacations, clothing and major household appliances. And more than half of Europeans and Americans have switched to cheaper grocery brands.

When asked which of these expense-saving strategies they planned to continue even after the recession is over, both Europeans (42%) and Americans (61%) most frequently mentioned cutting back on gas and electricity. Second most frequently mentioned on both sides of the Atlantic was continuing to use less expensive grocery brands. While the first strategy has clear implications for the struggling U.S. automobile industry, the second has clear implications for consumer packaged goods. Private label has always tended to do better in recessions, but if consumers hold true to what they say, then branded products may have difficulties picking up sales lost during the recession.

Biggest future concerns
The economy led the list in both Europe and the U.S. among the biggest concerns over the next six months, though Americans were more than twice as likely to see the continuing recession as their biggest concern. Job security, debt, health and work/life balance were among the top concerns cited.

Big, strong and still growing
Europe today looks very different than it did when the first cracks of light shone through the Berlin Wall. The European Union is more united and stronger than at any time in the past. It is also better off economically, even after integrating many of the former Soviet countries. And it continues to grow—at least six new countries are seeking entry into the EU. However, even with its more regulated system of capitalism, the EU is not immune to the global recession. Because more of Europe’s economy is based on trade than in the U.S., it was hit harder by the recession.

For much of the period since World War II, the economy of the United States has led the world, in good times and bad. Today, though, the EU is bigger and still growing, and will challenge U.S. dominance on a global scale.

Responding to a 52 nation survey by the Nielsen Company, close to half (45%) of consumers said they supported efforts by their governments to place trade restraints on foreign imports. Geographically, the percentages were even higher in Latin America (49%), North America (48%) and the combined regions of Asia Pacific, India, Middle East and Africa, where 47% of respondents either strongly agreed or agreed to some forms of protectionist measures.

Europe Not United in its Views

In Europe, however, only 39% consumers surveyed concurred with the proposition; albeit attitudes differed considerably among nations. Citizens of the former Soviet bloc, such as in Hungary (63%), generally scored higher than their western neighbors. Conversely, Nordic countries including Denmark (14%), Finland (20%), Norway (24%) and Sweden (15%) were well below the regional average. Moreover, those in Denmark and Sweden who strongly disagreed or disagreed with trade barriers outnumbered adherents by more than three-to-one; and in Finland, by more than two-to-one.

Protect at Home, Stay Open Abroad

Despite some appreciable support for protectionist policies within their own borders, consumers everywhere were markedly less enthusiastic about such practices in other countries. Indeed, when asked whether foreign governments should place trade restraints on imports, there were 13% fewer respondents who strongly agreed or agreed. The same was true in every region, where levels of support also were down by double digits.

As might be expected, the declines were most dramatic among consumers whose economies are largely export-driven. In Indonesia and Thailand, for example, support for trade barriers fell 31% and 22% respectively when carried out by other countries; while they dropped by 24% and 20% in the Czech Republic and Hungary.

Farms and Fords

Given the broad range of nations engaged in some form of trade restriction – including tariffs, subsidies, anti-dumping rules and “buy local” policies – the industries involved are equally diverse, though none is more universally protected than agriculture.

More than half of respondents in all but three surveyed countries – Hong Kong, Singapore and Vietnam – believe agriculture should be shielded from foreign imports. Nine of the top 10 nations are in Europe; with six from the former Soviet bloc and a seventh being Russia.

Consumers in North America showed the least support for protecting agriculture from imports, which may seem ironic to the rest of the world, since U.S. spending on farmers has long been a point of contention in World Trade Organization (WTO) talks.

On the other hand, U.S. consumers scored highest among nations wanting to protect their auto industries – not surprising considering the recent national debate surrounding automaker bailouts. However, foreign car companies now account for about a third of all auto production in the United States, and employ nearly 40% of the industry’s workers.

Unemployment and Global Economic Downturn

Although current findings show support for trade restraints, talk of global protectionism still outweighs the reality. But WTO Director-General Pascal Lamy says that could change. Forecasting a 10% slump in the volume of world trade this year – a post-war record – Lamay warns that even if economic activity begins to pick up in parts of the world, unemployment will continue to rise, prompting moves to protect local jobs and industries.

So far, according to Nielsen’s data, slightly more than half (55%) of all consumers in its survey favor hiring practices that treat new immigrants the same as native born or long-term residents; versus only 22% who disagree. Yet, a small percentage more (59%) believe governments should favor those businesses that hire native born or long-term residents; versus 16% who disagree.

One possible explanation may be that consumers distinguish between the practices of private enterprises and those of government. In other words, free markets should treat all people equally, while governments should favor their own citizens – a sentiment that shared across all regions.

View additional results from the survey.

Australia ranked fifth of the 28 markets Nielsen measures, just behind fast-growing developing countries Indonesia, India, the Philippines and Brazil, and well ahead of other developed nations.

Forty-four percent of Aussies believe “now is a good/excellent time to buy the things they want,” second highest of all nations surveyed, and 59 percent described their personal finances as good or excellent.  According to Nielsen Online’s Buzzmetrics service, the number of online discussions mentioning the word “recession” dropped 56 percent between February and June this year.

Despite growing levels of optimism among Australian consumers, there remains an air of caution, with 41 percent saying that they would put extra cash aside in savings and another 40 percent focused on paying off debts.

“Despite increasing confidence, Australians will still think twice about the way they spend their spare dollars until the economy has completely recovered.  The positive news is that Australia, when compared to other developed nations, is in a better position for faster economic recovery,” said Chris Percy, Managing Director – Consumer Group, Nielsen Pacific.

Read the full press release with more results from the survey.

“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.