Transcript: Christmas survey 2009 - A crisis year, but pessimism is decreasing
Deloitte Belgium Insights podcast
Welcome to a new episode of Deloitte Belgium Insights podcast. In this edition Deloitte announces the Belgian results of its twelfth European consumer study on year-end purchasing. Commenting on our findings we have in our studio today Marie-Noëlle Godeau, partner AERS, and Koen Neijens, director AERS.
Marie-Noëlle, what do Europeans and Belgians expect about the economic forecast?
Overall, Europeans remain pessimistic about the economic forecast, but the tone has become more optimistic than in 2008. Belgium follows that trend: almost 6 out of 10 Belgians believe that while the economy is currently still in recession, it will stabilize or improve in 2010. Fears about the recession are slowly decreasing.Over the past several months, we have seen key economic indicators ease from their worst levels, helping consumers to gain confidence. However, this is happening at a slow pace.
In the past year, Marie-Noëlle, we heard a lot about redundancies. How do people currently feel about their job security?
This hasn’t changed much compared to last year. Almost 7 people out of 10 in employment consider their job safe, while others either are uncertain or don’t know. This also has to do with how consumers look at the current financial situation of their employer’s. We’ve noticed that a vast majority of the Belgian consumers (6 out of 10) believe their employer’s financial situation is good or reasonably good. Only a small minority (1 out of 10) has an outspoken negative view on the financials of their employer, while 1 out of 4 Belgian consumers have no clue. This latter finding is consistent with the rest of Europe,where a significant number of employees and consumers seem to be ignorant about how their employer is performing financially.
Last year 3 out of 4 consumers stated that they had lost spending power. This year the study shows that not even half of the Belgian consumers has given up on spending power. How do you explain this result, Marie-Noëlle?
Despite this improvement, still 43% of the consumers see their spending power fade away which largely outnumbers the ones that have an improved purchase power (10%). So despite the Belgian system of salary indexation, and despite the positive evolution of energy and food prices, many people still perceive a loss of purchase power. The low employment rate in Belgium will probably play an important role as a significant part of the population doesn’t benefit from salary indexation.
Koen, has the consumer changed its behaviors due to the economical downturn of last year? If so, how should retailers cope with the post-crisis consumer?
The crisis shows that there has been a shift in consumer behavior. Some changes are the result of the crisis. Others have been accelerated by the crisis. It's now all about changing "value and values". On one hand, “Value” refers to the rational, well-informed and cost-conscious consumer. This consumer is price-sensitive and wants value for money. This is the new consumer that we have seen emerge over the past two years and which is here to stay, also after the crisis. On the other hand, we have “Values”. Values refer to topics like corporate responsibility, climate change impact, health concerns, sourcing of products, etc. Both, the notions of value and values influence the behavior of consumers. Retailers who want to be successful will therefore have to connect with consumers differently than before and ensure they recognize changes in “value and values”.
What is the expected result on our holiday budget, Koen?
Deloitte expects a slight decrease in the total Belgian year end holiday spending, which will bring the total average spending on € 580. This is the 4th year with decrease in a row. We expect the Belgian consumer to give less gifts than last year (average of 8 gifts), but that he is willing to pay slightly more for them (an average of € 39 per gift).
Koen, what can we expect as a year-end present?
1 on 2 Belgians would like to receive a gift voucher as a present, which makes Belgium the only country where this kind of gift is the top pick. Vouchers are not only the most desired gift, but are also the most purchased present in Belgium. Also cash is becoming ever more popular on people’s wish-list. At the moment of our survey, 20% of Belgian consumers did not know yet what they will be buying as a Christmas gift.
And finally Koen, will the Belgian consumer use the internet for its purchases?
57% of the Belgian consumers said “yes” to this question. Compared to other European countries, the participation of Belgians in internet shopping continues to lag behind. Despite efforts by traditional and on line retailers to increase the number of webshops, and also despite significant sales increases reported by the Belgian e-commerce industry,Belgians use the internet primarily to look for information about products, prices and stores.
Thanks Koen and Marie-Noëlle for your comments and insights. Please tune in again for one of our latest episodes of the Deloitte Belgium Insights podcast.