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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.

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.

Declines were especially steep during the last four weeks of the quarter, which saw the collapse of Lehman Brothers, the near-collapse of Merrill Lynch, and the government bailout of AIG.

Traditional mass retailers (excluding supercenters), department stores, and office supply stores saw the most dramatic declines in the number of shopping trips last quarter vs. a year ago.  Trips to mass retailers dropped by 9.1%, trips to department stores were down by 8.9%, and trips to office supply stores fell by 7.9%, Nielsen reported.

Retail channels offering low prices, strong value, and mostly “need to have” products — versus “nice to have” items — fared the best during Q3 2008.  Trips to online retailers (+7.5%), supercenters (+3.6%), and dollar stores (+3%), for instance, showed the largest increases, compared with Q3 2007.

More affluent consumers looking for bargains drove the growth in trips to value retail channels, while lower-income households adopted more drastic cost-cutting measures, eliminating shopping trips entirely, according to Nielsen.

U.S. consumers surveyed by Nielsen in late September and early October also reported having significantly less discretionary income than their global peers. 

Almost 25% of U.S. consumers reported having no spare cash after covering their essential living expenses.  In comparison, just over 10% of consumers worldwide reported a similar lack of expendable income.

U.S. consumers were also more likely than consumers worldwide to use expendable income to pay off debts, Nielsen found.  More than 35% of U.S. consumers reported using their spare cash for debt payments, while only 30% of consumers worldwide reported the same.

In early October, Nielsen’s holiday retail forecast estimated that 85% of U.S. consumers plan to spend the same or less on holiday shopping, versus 2007.

Stay tuned on Nielsen Wire for regular updates on U.S. retail trends, and other key economic indicators.

While 53% of those surveyed by Nielsen think their country has hit a prolonged recession that will last more than 12 months, 18% of consumers, concentrated in a handful of emerging markets, like India, Vietnam, China, and Russia, told Nielsen they expect their countries to be out of recession within the next 12 months.

In contrast, consumers in Japan, Germany, Argentina, Mexico, Turkey, Italy, Taiwan, the U.S., and Spain were the least optimistic about the prospects for quick economic recovery.

Nielsen surveyed 28,663 Internet users in 52 markets across Europe, Asia Pacific, the Americas, and the Middle East between September 22 and October 6, 2008, as part of its Global Online Consumer Survey.

The survey’s results reveal that global consumer confidence fell to a new low this month, dropping from an index of 88 in May 2008 – previously the lowest index on record – to 84 in October, according to Nielsen.  Only Brazil, the Philippines, New Zealand, China, Thailand, South Africa, and Hungary showed improved consumer confidence, compared with May 2008.

Not surprisingly, consumers worldwide are adopting new strategies to reduce discretionary spending and shore up household finances.
 
On average, 49% of global consumers plan to spend less on new clothing, as well as gas and electricity, according to Nielsen. 

Meanwhile, 47% report reducing out-of-home entertainment, 40% say they’ll delay upgrading to new PCs and mobile phones, and 39% will cut down on take-away meals from restaurants. 

Even necessities, like groceries, are on the chopping block — 36% of global consumers report switching to cheaper grocery brands in order to reduce their expenses.

Overall, consumers in Australia, New Zealand, Germany, the U.K., Turkey, the U.S., Colombia, and Argentina plan to make the most changes in their spending habits, as they search for ways to weather the current economic turmoil.

View the full press release.

Read a related press release on consumer confidence in Hong Kong and Great Britain.

Read coverage of Nielsen’s findings by Sky News and in the Shanghai Daily, the Business Standard (India), Forbes, the Financial Times, The China Post, the Thanh Nien Daily, and the Malaysia Star.

Learn more about global consumer confidence levels in the December 2008 issue of Nielsen’s “Consumer Insight” online newsletter.

Nearly two-thirds (65%) of U.S. Consumers reported they notice nutritional information on food packaging more often now than they did two years ago.  More than half (51%) said they always check the fat content on nutrition labels, while nearly half check labels for calories (48%) and trans fats (43%). 

Nielsen also found that two-thirds (67%) of U.S. consumers claimed they “mostly” understand the nutritional information on food packaging, while less than half (44%) of consumers in other countries reported the same.

The Nielsen Global Online Consumer Survey was conducted in April 2008 among 28,253 Internet users in 51 markets in Europe, Asia Pacific, North America, and the Middle East.

View the full press release.