While global consumer confidence continues the slow but steady climb upward from the lows experienced in the first quarter of 2009, consumer spending is following a similar trajectory according to the latest Nielsen Economic Current. China, India and Brazil have realized gains in dollar and units sales in Q1 2010 in excess of 5% as the positive economic outlook across many of the emerging economies is materializing into increased spending.
Several Western Europe economies, namely Germany, United Kingdom and France, reported moderate growth in Q1 with consumer spending between 1% and 4%. However, the escalating European debt crisis that has damped confidence in Q2 may impact future growth. In North America, the contrast between increasingly optimistic Canada and cautiously restrained U.S. is being reflected in dollar sales. Across both the U.S. and Canada consumers are cutting back on shopping trips, seeking value and establishing a balance of branded and store brand purchasing.
Advertising spending also improved in Q1 as 25 of the 31 countries reported in Nielsen’s Global Ad Spend Report experienced gains of greater than or equal to 5%. Two globally significant events – Winter Olympics and FIFA World Cup – were driving forces behind this trend. Economically struggling countries Japan, Ireland and Spain were the only countries with flat to declining ad spending in Q1.
What to Watch
In the second half of 2010, against the backdrop of a shaky global economy, consumers in emerging markets will remain more willing to spend on discretionary categories such as apparel, vacation and out-of-home entertainment. In the developed economies where a largely jobless recovery is taking place, the consumer remains very reticent as they are closely monitoring their spending. Value remains the mantra and the new normal is characterized by restraint.
Download the Q2 2010 Nielsen Economic Current.