The common refrain is “the only thing constant is change.” But what if everything was constant?
Nielsen’s 2015 Mood of the Nation study revealed that the Egyptian consumer, for the first time in years, was consistent in sentiment and spending habits when comparing the start of the year to the end of it.
Nielsen has been measuring the Mood of the Nation in Egypt since 2011. Through this study we develop an understanding of the Egyptian consumer sentiment toward the economy, while measuring and monitoring spending habits.
In first-quarter 2015 the majority of respondents claimed that they would keep their household spending levels the same compared to six months prior. Comparing it to the results of third-quarter 2015, even more respondents have decided to retain their same purchasing behaviors, without cutting too many expenses.
The only change to this sentiment occurred around the Ramadan holiday, when consumers were more inclined to spend on food and groceries and less on unrelated luxuries, such as electronics and vacations.
While consumers are less willing to spend more—a potential difficulty for growth—there is some good news with consistency: navigating the market becomes easier.
In the third-quarter 2015 Consumer Confience Index report, Egyptian's optimism about future prospects, be it on the job front, personal finances or future investments, increased. In fact, even consumers' sentiment toward potential improvements in the economy has improved.
However, the ‘now’ is where the challenge lies. Only 25% of the respondents claim that they are living comfortably, leaving 49% just getting by, and 25% facing difficulty.
A deeper dive into the financial choices consumers have made towards the end of 2015, in comparison to the year’s start, shows consumers taking fewer actions to save money, and more choices to keep a sufficient flow of cash.
The rate of using investment certificates fell by half to reach 9% between the first and third quarters. Meanwhile, the use of savings/checking accounts went up 23 points to reach 91%.
The lion share of the average Egyptian’s spending goes to food for home consumption, at 53%. The rest is split out amongst other needs and luxuries, from health care to eating out, with these commanding between 3% and 8% of their wallet share.
While paying utility bills only took up 6% of consumers’ wallet share, their No. 1 saving priority is on gas and electricity. And although food takes up most of their income, they are less keen to make major changes in their consumption habits.
For instance, consumers are more willing to buy fewer products than shift to cheaper brands. The good news this brings the opportunity for brands to reward its loyalists. Brands can guarantee consumers in a market where growth opportunities might not be available yet. And they can strengthen shopper loyalty by tapping into what matters to them.
When it comes to priorities, 79% of consumers feel responsible for helping the community where they live. This attitude is helping companies do better by ‘doing good.’
While brands can find opportunities to grow even as consumer sentiments remain consistent, they shouldn’t forget that change could be around the corner. In fact, 73% of respondents of the Mood of the Nation survey in third-quarter 2015 feel that too many changes are taking place in their immediate living situation, resulting in ambiguity for the future.