As consumers gritted their teeth to bear the effects of the potential fiscal cliff, confidence in the economy and personal financial health took a plunge at 2012’s close. SymphonyIRI’s Shopper Sentiment Index dropped to its lowest point in more than 12 months during the last quarter of the year.
At the beginning of 2012, the index pointed toward an uptick in consumer confidence, brand loyalty and consumers’ ability to maintain a desired lifestyle without having to make significant changes to their spending patterns. However, when expected economic improvement failed to materialize, the index dropped to 94 in Q4 2012. Compared to the benchmark score of 100 from Q1 2011 and 99 in Q3 2012, this was a noteworthy change.
Heavily impacting the low score was the outlook of consumers in the 35-54 age group. Especially pessimistic, 43 percent of the segment indicated that their financial situation weakened in 2012. In this life stage, consumers are particularly attuned to future financial demands. As they fork over college tuition money and put aside funds for retirement during a down economy, many are cutting out unnecessary expenses, such as trips to the beauty salon and restaurant rendezvous. Compared to the average consumer, they also over-index in frugal shopping strategies, such as steering clear of certain grocery aisles to avoid unplanned purchases or using coupons to make lists. Findings for Q4 2012 include:
- 48 percent of 35-54 year olds bring food to work and school more often to save money, versus 40 percent of the total population
- 42 percent of 35-54 year olds go out with friends and family to socialize less often, versus 36 percent of the total population
- 27 percent of 35-54 year olds have difficulty affording groceries, versus 22 percent of the total population
As a whole, consumers of all ages remained thrifty throughout the end of the year. It seems the key to weathering the unpredictable economic situation is simplification. Will shoppers’ frugal yet savvy attitude last in 2013? Stay tuned for quarterly updates!
For more information about SymphonyIRI’s Q4 2012 MarketPulse survey and Shopper Sentiment Index, please read the recent press release.