In a further sign that the economic downturn is more widespread than any before, Russian consumer confidence dropped 6 points in February 2009 from November 2008, when it dropped 16 points from September 2008, according to Nielsen’s Consumer Confidence Index. The issues causing Russians nervousness mirror those found in other countries: growing unemployment, high inflation, devaluation of national currency and the burden of easy credit obtained during the “optimistic” years. Maintaining employment is the key concern, with only 20 percent saying their job prospects were good, while 75 percent were pessimistic about their jobs.
Only 47 percent of Russians were confident of their personal finances, a decline of 4 percent since November 2008. 67 percent said that the next year is “not a very good or bad time” to make purchases.
Food inflation fueled 22.5 percent sales growth in 2008, but volume growth slowed later in the year and actually showed a slight decline. As in other markets, value has become the key factor in purchasing decisions, and consumers are tending to return to basics. Categories that showed solid volume growth included soups, bouillons, instant meals, seasonings, noodles and soup/meal makers, drinking yogurt and coffee.
Nielsen conducted a survey among 500 internet users in mid-February as part of its “Russians Through Crisis” research project, which gauges confidence levels and spending intentions of Russian consumers in the current economic downturn.
The press release containing more information about Nielsen’s findings can be found here.