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Economic Uncertainty Drives Down End-of-2012 SymphonyIRI Shopper Sentiment Index™


Susan ViamariSusan Viamari

Posted on Wednesday, January 30th, 2013

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.


One Response for "Economic Uncertainty Drives Down End-of-2012 SymphonyIRI Shopper Sentiment Index™"

  1. Mark Eastwood February 19th, 2013 at 4:40 PM

    As I think about the 35-54 age group, these are people in their prime earning years who are also still large consumers. They might very well have families and therefore economic uncertainty hits them hard. The smart thing to do when life is uncertain is to hold back. Let’s delay that purchase or go private-label over national brand to save money. The government is promoting a (political) view that “the worst is over” but then they can’t settle on spending cuts because they are too busy thinking of new taxes to give them more money to spend. If only personal finances were as easy to increase, we’d all be millionaires. The prospect of significant new taxes at all income levels is perceived as real. Therefore I should spend less to be in a better position to absorb the new taxes.

    The other reality facing all economic and age groups is raising prices. Everything costs a bit more than 6 months ago, gasoline is higher, droughts and super storms are causing shortages and other challenges. As the new nationalized healthcare laws start to take effect, uncertainty about care and the prices for insurance, the availability of insurance, insurance exchanges, employers dropping insurance and forcing consumers into exchanges all weigh on the outlook for 2013 with additional uncertainty. Risks can be evaluated and perhaps mitigated, uncertainty cannot. This age group likely has a high percentage of children in college or planning college whose costs also are rising faster than inflation.