Booz: Consumer Frugality Here to Stay

A "new frugality" born of the Great Recession and evidenced by two consecutive years of declining per-capita consumption is now becoming entrenched among US consumers and is reshaping their consumption patterns in ways that will persist even as the economy starts to recover, according to a study from Booz & Company.

Cuts in per-capita consumption spending have been recorded across all demographic groups, but they have been most pronounced among lower-income women, the study found. Consumer outlook, meanwhile, is modestly conservative: Only 32% households expect to be better off this year.

Below, other findings from New Marketing Imperatives: US Consumer Spending and Shopping Behavior Emerging from the Recession.

Recessionary Behaviors Are Hardening

The new frugality—characterized by a strong value-consciousness that dictates tradeoffs in price, brand, and convenience—has become the dominant mindset among consumers:

• 65% say they consider saving more important than spending.
• 65% say they sacrifice convenience for price.
• 65% say they frequently use coupons.
• 55% say they prefer the best price to the best brand.

Moreover, in the previous 12 months, consumers have continued to cut back on spending in 16 major categories, especially in discretionary spending: 58% of consumers say they have cut back on eating out, while over one-half say they have cut back on consumer electronics (53%), apparel and clothing (53%), and media and entertainment (51%).

→ end article preview
Read the Full Article