The notion that the global economy may be on the verge of recovery has not yet translated into improved consumer spending or confidence, although consumers in the emerging countries - Brazil, India and China - seem to be more optimistic than others and are loosening their purse strings ever so slightly, according to the new edition of the Nielsen Economic Current. Of the 12 countries Nielsen now tracks, all but Taiwan (which declined) showed no significant change in measures of spending. Canadian, Western European and American spending was, at best, restrained.
In the U.S., consumers remain skittish. Shifts to private label brands continued at a strong pace, as they have for the last eight months, while consumers are shopping less frequently and spending less per trip. Canadians, on the other hand, are spending more per trip, and are taking advantage of retail promotions. Unlike in the U.S., private label brands are struggling to gain share as national brands step up promotional activity.
In Europe, the French remain relatively unchanged in their shopping. Value channels continued to see growth and more retailers were selling on promotion, leading to a modest increase in the amount spent per trip. Germans showed very little change in the number of shopping trips they took, nor did they increase or decrease how much they spent. Unit sales increased, however. In the UK, sales volume improved slightly from the previous month, while budget store brands' growth slowed as consumers began returning to premium brands. British shoppers were also spending slightly more per trip. Italians continued to move to store brands and value channels, although they were reducing their shopping frequency. Spaniards, who have been among the most optimistic, have not seen that reflected in spending.
Brazilians showed an 8 point surge in optimism, and this translated into more frequent shopping trips and higher sales, in both volume and value terms. Hong Kong and China both showed growth in sales, but Taiwan showed declines, and optimism there was among the lowest in Asia. Indian consumers' confidence was high, and volume and value sales both increased by more than 5 percent.
"While things are starting to look up, it's clear that Americans and Western Europeans aren't quite convinced that recovery has taken hold and remain cautious when it comes to shopping. The labor market is clearly affecting this behavior. It comes as little surprise that Brazil, India and China - countries that have generally been less affected by the global recession - are among the first to see renewed consumer confidence and sales growth," said James Russo, Vice President, Global Consumer Insights at The Nielsen Company.
While the idea of recovery hasn't opened up global consumers' wallets quite yet, it has started to infiltrate their discussions on the Web. In June, 71 percent of survey respondents thought that their countries were in recession, an improvement from the 77 percent who thought the same in April. Additionally, 26 percent believed that their country will be out of a recession in the next twelve months, up three points from April. Global recession buzz has declined 27 percent since March. In July, however recessionary buzz perked up, primarily in Western Europe.
"We are likely to see an overall downward trend in recession discussions, but it will be choppy until consumers really feel as if they are experiencing the recovery," said Russo.
Download the latest Nielsen Economic Current.