How NZers' recession reactions compare globally

Date Friday, 20 February 2009
Press Release:

International Study Shows New Zealanders Are Amongst The Least Concerned About The Recession, But Still Cutting Back Spending And Switching Brands

SURVEY DETAILS
International market research company Synovate, in conjunction with retail analysts Synovate Aztec, recently surveyed over 12,000 people in 20 countries, asking them about the current economic crisis.

402 New Zealanders were included in the survey, providing a rich insight into what New Zealanders are thinking and doing in the recession, and how we differ from the rest of the world.

The maximum margin of error for a survey of 402 people is 4.9%.

NEW ZEALANDERS BY NO MEANS THE MOST PESSIMISTIC
The survey results show that New Zealanders are by no means the most pessimistic:
• 55% of New Zealanders agreed with the statement that the local economy is “going downhill and likely to get worse before it gets better”.
• Those in Western Europe were more negative, especially in the UK (75%) and France (65%). Also more negative were Americans, 69% of whom agreed with this statement. Australians had similar views to New Zealanders, at 54%.
• In contrast, 20% of Danes felt that their local economy is strong – only 1% of New Zealanders felt this positive.

LESS THAN A THIRD OF NEW ZEALANDERS EXPECT THEIR PERSONAL ECONOMIC SITUATION TO WORSEN
Despite the 55% of New Zealanders feeling that the local economy is likely to get worse before it gets better, only 31% expected their personal economic situation to get worse.
• By comparison, 34% of Australians, 46% of British people and a huge 56% of Turkish people feel their personal situation will worsen.
27% of New Zealanders expect their personal economic situations to actually improve, a level higher than Australians (22%) but well behind Brazilians (65%) and Malaysians (44%).

NEW ZEALANDERS ARE MAINLY WORRIED ABOUT JOB SECURITY, BUT ARE MORE LIKELY TO WORRY ABOUT KEEPING A ROOF OVER THEIR HEADS THAN MOST OTHERS
New Zealanders’ main worry is job security, with 29% worrying about their jobs.
• Canadians (20%), Australians (18%), and the British (17%) are less concerned about their jobs.
• Those in Russia (55%), Turkey (52%), and Taiwan (41%) are the most concerned about job security.
New Zealanders’ next biggest fear was their ability to keep paying the mortgage or rent, with 20% citing this issue - 9% more than those surveyed overseas (11%).

NEW ZEALANDERS AMONGST THE MOST LIKELY TO HAVE ALREADY MADE SPENDING CUTS
73% of New Zealanders have already reduced their personal spending, behind only Turkey, the US, Greece and Bulgaria. 78% of US people have made such cuts, along with 69% of UK people and 68% of Australians.
• Items to first feel the New Zealand spending cuts were ‘treat foods’ such as alcohol and soft drinks (19%), and branded items that could be replaced by cheaper house brands (17%). New Zealanders were considerably more likely to reduce spending in these areas than overseas people. These reported increases in housebrand usage were supported by New Zealand grocery data analysed by Synovate Aztec, who reported that pet food is one area where New Zealanders are specially likely to be switching to housebrands.
• New Zealanders were more than twice than their global counterparts to be reducing their spending on dairy products, with 34% of New Zealanders reporting reduced expenditure on dairy items, compared to just 15% of the total international sample. Increases in cheese prices especially had an effect, with Synovate Aztec reporting that the share of housebrand sales in New Zealanders’ cheese purchases has increased by over 5% over recent years.
• Other areas where New Zealanders are much more likely to have made cuts are cosmetics (34%); healthcare products (32%); and bottled water (26%).
• New Zealanders are also more likely than people in most overseas countries to have started hoarding food against anticipated process rises (25% claiming to do this compared to 18% of those in the other countries surveyed).
• But there are some things New Zealanders are more reluctant to give up, especially when compared to the rest of the world. Of the total international sample, 15% said that holiday and leisure travel was the first thing they gave up during the recession, compared to just 11% of New Zealanders – Kiwis’ love of travel remains high!

COMMENTARY
Clearly, significant switching has occurred across a wide range of people and product types, and it’s not just the price tags that’s driving this. Aspects such as the ‘fairness’ of pricing, awareness of the relative quality of supermarket housebrand products, and a rebalancing of the budget all come into play.

Synovate New Zealand’s Executive Director Debra Hall says it’s all about understanding how consumers think about pricing:
“People don’t just think about the price. IF they think about it at all (and this is by no means certain) they may think ‘can I afford this’, or ‘is this a fair price for what it is’ or ‘is it good value’ or ‘am I willing to pay this much for this thing’… all these are different questions, leading to different results.”

Hall also adds that:
“Companies that will win in the recession will be those that have been able to build emotional bonds between their brands and their customers, as these brands are the least likely to be traded for something cheaper. Whether premium or value, in high or low interest categories, consumers will be willing to make other sacrifices to continue to buy these brands. Brands most at risk are those which have failed to differentiate, in markets where commodity options offer just about the same products, at much lower prices – hence the growth of private label supermarket goods.”

ENDS

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