Year-end survey 2008
Careful consumers in uncertain times
Today Deloitte announced the Belgian results of its eleventh European consumer study on year-end purchasing. In total, the opinions of over 18,000 consumers were polled in seventeen countries in Western and Eastern Europe, and in South Africa. This included over 1,000 Belgian residents surveyed in early October. We present the most significant results and trends for Belgium.
11th Christmas study from Deloitte shows overall reduction in the amount of year-end purchases estimated to reduce only 4%, despite the high level of uncertainty in the market:
Economy: a watchful view – Belgians are more concerned about the economic situation than other West-Europeans
Although Western Europe as a whole is concerned about the state of the economy, Belgian consumers are more concerned than their neighbours. A very large majority (87%) of Belgians think the economy is in recession. Only 57% feel secure in their jobs, compared to 66% last year. People with lower incomes feel less secure than high earners.
More than 69% of Belgians expect things to weaken further in 2009. Last year 48% of Belgians thought their purchasing power would decrease in 2008. Today no less than 75% expect it to decline in 2009, despite the system of indexed pay. Twelve months from now, family financial positions will fall, say 49% of Belgians, especially those with low incomes.
At the time of the survey (early October), 45% of Belgians thought that the financial crisis would have an impact on their general level of spending. The European average was 47%.
Rational spending: Belgians are setting a Christmas budget, but rather decrease spending on presents than on food
In this climate, it is no surprise that 73% of Belgians have said they will ease up on holiday spending, mainly due to increases in food prices and to a lesser extent rising energy costs. The recent fall in energy prices should have a positive effect when holiday shopping begins.
In a new trend, many more Belgians will be setting a Christmas shopping budget: over 45% compared with only 28% last year. This is a clear sign that consumers are wary of impulse buying, preferring to make carefully considered purchases in an uncertain economic period. Interestingly, across all income levels women (52%) are more likely than men (39%) to set a budget.
Contrary to fellow Europeans who see a decrease in purchase power, Belgians rather decrease spending on presents than on food. In fact, 42% believe they will cut gift spending this year. The first ones to be crossed of the present list will be colleagues, friends and shoppers themselves. Children and partners will be the last to be deprived of holiday gifts.
Despite the high level of uncertainty in the market, the overall reduction in the amount of year-end purchases is estimated to be only 4.2% (versus last year’s drop of 2.5%). While last year, spending on gifts went down while food outlays rose, this year it is expected that spending in both categories will decline, with the gift amount dropping by 6.3% and food spending down 1.4%. Koen De Staercke, Consumer Business Industry Leader at Deloitte adds: “Although the times are uncertain and the Belgians are rather pessimistic about the future, we can see that the Belgians are keen on celebrating Christmas and the End of 2008 not a lot different compared to previous years; they do not wish to save too much money on the Christmas dinner and gifts”.
Changing shopping patterns: looking for the best value for money
Given a self-imposed holiday budget, what will the Belgian shopper be looking for this Christmas season? To maximise their resources, 54% of Belgians say they will pay attention to price promotions, 46% will try to buy gifts that are actually useful, 26% will save on luxury articles, and 17% will be on the lookout for unbranded “private label” goods.
Perfectly matching the European average, 38% of Belgians are increasingly prepared to spend more time looking for the best value for money. This is illustrated by the primary use of Internet in Belgium: comparing prices (see below).
Focusing on food, 58% of Belgians claim their buying behaviour won’t change at all. Yet 27% plan to shop more at discount stores, 19% will choose more private label products, and 13% will indulge on fewer premium brands.
Sustainable spending? The current economical environment affects ethical consumption choices
Does the current economical environment affect ethical consumption choices? The answer is yes. Compared with previous year, more Belgians say that a product’s production method (35%) and origin (32%) play a role in their purchasing. Yet only 45% are willing to actually pay more based on these criteria, a significant drop from last year’s figure of 54%.
Ethical and environmental motivations are shared by a broad range of consumers, regardless of income level. Unsurprisingly, though, it is only the most affluent whose ethical shopping is unaffected by price considerations.
Increasing amount of Belgians use Internet for end of year shopping
The use of the Internet in the context of year end shopping sees a real breakthrough in the last months of 2008. Last year only 48% of Belgians said they would use the Internet. This number has now significantly risen to 63%. Belgian men (77%) will be online more frequently than Belgian women (59%). The Web is especially used as a tool for comparing prices (26%), while only 7% of respondents use it to make purchases. This, again, emphasizes the rational behaviour of consumers who want to be better informed.
Compared with European averages Belgium is still a digital laggard. Seventy-two percent of Europeans used the Internet last year for holiday shopping. This will remain stable in 2008.
Internet use varies with income. Consumers in upper income brackets are most likely to use the Web, especially to complete purchases. The affluent especially appreciate the practical aspect of home delivery. For lower-middle class consumers, having more choice is the primary reason to shop online.
What next? Managing in uncertain times
About the study
This Deloitte study evaluates year-end consumption in 17 European countries and in South Africa. In total 18,178 people were surveyed. A similar survey was conducted in USA. Survey data was collected in co-operation with a research company during the end of August in the UK, September and the first week in October 2008. This year, three new countries were included: Slovakia, Romania, Ukraine. Respondents were aged 18 years and older. Information was collected mostly via the Internet, with face-to-face surveys conducted in Russia and Ukraine.
A leading audit and consulting practice in Belgium, Deloitte offers value added services in audit, accounting, tax, consulting and corporate finance. In Belgium, Deloitte has more than 2,300 employees in over 14 offices across the country, serving national and international companies, from small and middle sized enterprises, to public sector and non-profit organisations. The turnover reached €308 million in the financial year 2008.
The Belgian firm is a member of the international group Deloitte Touche Tohmatsu, an organisation of independent member firms devoted to excellence in providing professional services and advice.
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