The impact of crisis on purchasing intentions

How does the post-recession consumer review his purchasing intentions?1st July 2010

Contents

Is the crisis behind us ?

Nothing will ever be as before !

Purchasing intentions in 2010

Do A-brands still resist ?

All men are equal… What about consumers ?

What does today’s shopper expect ?

Conclusions

Is the crisisbehind us ?

More positive feelings ?

National universe ; 18-54 years ; May 2009 & March 2010

I fear for loss of job

I fear for the future

I try to put money aside for harder times

I think several times before spending one euro

12%

20%

39%

38%

13%

22%

38%

42%

2009 2010

National universe; 18-54 years ; May 2009 & March 2010

Ends of months are hard

We are doing very well

Without opinion

Less money worries ?

2009 2010

34% 32%

44% 44%

22% 24%

2009 2010

39% 35%

38% 41%

23% 24%

Obligation to give up the extras

We spend a lot of money to enjoy ourselves

Without opinion

2009 2010

43% 39%

24% 28%

33% 33%

No possible savings

We put quite a lot of money aside

Without opinion

Nothing will ever be as before !

The post-recession consumer is likely

to consume

very differently

!

Experts and observers agree…

We’ll live in a new business landscape !

• Financial• Social• Culpability• Hyper-

consumption• Values

Crisis

• Sudden awareness

• Readjustement of the modes of purchase

• Ethical & environmental concerns

New reflexes

• Back to the essential

• Simpleness• Responsibility• Useful

expenditures• Smart shopping

Structural changes

It’s now trendy to be frugal & thrifty !


I pay much attention to promotions

I'm careful with my expenses

I regularly use coupons

49%

52%

55%

Current purchases

Attitudes 2010 – Top 3

I save on the extras

I often stay at home or I do things at home because it's

cheaper

I avoid or I limit famous brands for clothes & shoes

35%

38%

40%Leisure activities &

equipment

Attitudes 2010 – Top 3

Purchasing intentions

Fast Moving

Consumers Goods

FMCG : expenses are not irreducible !

National universe ; 18-54 years ; May 2009 & March 2010 ; buying intentions

2009 2010

11%23%

72%

69%

15%7%

decreasing expenditures

stable expenditures

increasing expenditures

don’t know

FOOD

2009 2010

16%28%

71%

66%

10%4%

DRINKS

FMCG : expenses are not irreducible !

National universe ; 18-54 years ; May 2009 & March 2010 ; buying intentions

2009 2010

12%28%

75%

67%

11%4%

decreasing expenditures

stable expenditures

increasing expenditures

don’t know

HOUSECARE

2009 2010

22%32%

64%62%

9%4%

HYGIENE & BEAUTY

Leisure

Let’s go, but with less money !


state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

25 27

37 39

10 7

81% 78% 86% 79%

-4% +10%

state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

33 33

41 43

5 3

-8%

Trips & Holidays

Restaurant

87% 82% 92% 82%

-6% +12% -10%

Total customers

Decreasing budget

New customersDon’t know

Equal budget

Increasing budget

The most optimistic intentions !

More necessary than it appears !


statements 2008

intentions 2009

statements 2009

intentions 2010

23 24

3237

31

New customers

Don't know

Increasing budget

Equal budget

Decreasing budget

Total customers

70% 61% 79% 66%

-13% +29% -16%

Time outReality goes far beyond

the intentions !

Crisis, always crisis! And what about me?


state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

14 19

3539

42

62% 56% 74% 64%

-9% +31%

state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

16 17

2530

22

-14%

Sport

Relaxation & well-being

54% 46% 67% 54%

-16% +45% -19%

Total customers

Decreasing budget


Equal budget

Increasing budget

Largest increase between 2009 & 2008 !

Personal equipment

No more place in my wardrobe, anyway !


statements 2008

intentions 2009

statements 2009

intentions 2010

2837

6155

7 3 New customers

Don't know

Increasing budget

Equal budget

Decreasing budget

Total customers

99% 98% 99% 97%

-1% +1% -2%

ClothesA large part of

decreasing budgets !

Temptation is strong…


state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

27 25

40 44

2 4

82% 73% 87% 76%

-11% +20%

state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

28 26

33 37

1 3

-13%

PC, games, …

Audio & hi-fi

74% 66% 84% 70%

-12% +27% -17%

Total customers

Decreasing budget


Equal budget

Increasing budget

Reality goes far beyond the intentions !

Household equipment

Home sweet home…


state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

26 25

36 35

13 17

86% 83% 89% 82%

-3% +7%

state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

24 24

38 36

4 7

-8%

Home

Garden

76% 71% 79% 71%

-6% +12% -10%

Total customers

Decreasing budget


Equal budget

Increasing budget

The most optimistic intentions !

The dog is man’s best friend !


statements 2008

intentions 2009

statements 2009

intentions 2010

8 11

4240

3 2 New customers

Don't know

Increasing budget

Equal budget

Decreasing budget

Total customers

60% 55% 62% 59%

-8% +11% -4%

Pets The greatest stability !

Not expected breakdowns ?


state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

22 23

3542

32

74% 67% 85% 73%

-10% +27%

state

ments

2008

inte

ntions

2009

state

ments

2009

inte

ntions

2010

16 18

2535

4

4

-14%

Small appliances

Big appliances

59% 55% 76% 63%

-6% +38% -16%

Total customers

Decreasing budget


Equal budget

Increasing budget

Reality goes far beyond the intentions !

Do A-brands

still resist ?

Globally, the highest preference rate !

« Dove, Dreft, Danone,etc »

« Delhaize, 365 (Delhaize), Cora, Carrefour, Everyday (Colruyt) »

« Numéro 1 (Carrefour) or brands by Aldi, Lidl, Leader Price… that are not A-brands»

% A-brands

% Private labels

% White products

National universe ; PRP 18-54 years ; base = total users ; average 40 FMCG categories ; May 2009 & March 2010

2008 2009 2010

62.8 61.3 59.9

26.4 26.6 23.6

10.8 12.1 16.5

Amongst 40 registered FMCG categories

Snacking

Food (total)

Drinks

Housecare

Hygiene & beauty

Cooking aids

Average 40 FMCG

-1.2%

-2.2%

-2.8%

-3.3%

-4.1%

-4.2%

-2.9%

Sectors : the biggest challenges ?

2008 2009

63% 61% 60%

83% 80% 79%

59% 56% 58%

67% 64% 63%

59% 57% 56%

54% 54% 50%

62% 62% 59%

Preference rate of A-brands

National universe ; PRP 18-54 years ; base = total users ; May 2009 & March 2010 ; evolution in points 2010 vs 2008

2010

Evolution 2010 vs 2008

How do the FMCG categories behave ?

Milk

Deep-frozen food & ready

meals

Cheese

Coffee

Still mineral water

Oil & butter

Washing products

Toilet tissue & kitchen roll

Canned food

Toothpaste & buccal hygiene

Special beers

Cereals

Shampoo

Fruit juice

Soda

Hair products

Pils beer

Tissues

Jam

Cola drinks

Stain remover

Soap & gel

Chips

Face care products

Yoghourt

Household products

Sugar candy

Dressings

Energy drinks

Probiotic drinks

Candy bars

Vitamins & mineral salt

products

1st quintile

-7.8%2nd quintile

-4.2%3rd quintile

-1.9%4th quintile

+1.2%5th quintile

+4.8%

Washing up products

WC products

Deodorant

Biscuits

Ice-cream

Ready desserts

Chocolate

Body care products

National universe ; PRP 18-54 years ; base = total users ; May 2009 & March 2010 ; evolution in points 2010 vs 2009

49.2% 55.7% 63.4% 63.9% 61.6%Preference rate of A-brands

All men are equal… What about consumers ?

Consumers’profile

What is the profile map made of ?

March 2010

1. We are doing very well2. We spend a lot … to enjoy

ourselves3. We put quite a lot of money aside

1. I think several times before spending…

2. I try to put money aside for harder times

3. I fear for the future

1. Current purchases : I’m careful with my expenses

2. Leisure : I save on the extras

Average for 40 FMCG categories

Similar budget1. Current purchases :

food, drinks, housecare, hygiene & beauty

2. Leisure : trips & holidays, restaurant, time out, sport,

relaxation & well-being

3. Personal equip : clothes, PC & games, Telecom, Audio & hi-fi

4. Household equip : big appliances, small appliances, home, garden, pets

Positive fi

nancial s

ituatio

n

Positive fe

elings

Positive a

ttitu

des

Prefe

rence ra

te o

f

A-b

rands

Current p

urchases

Leisure

Personal e

quip.

Household e

quip.

70

80

90

100

110

120

Transposition into affinity index

National universe ; 18-54 years (A-brands = PRP 18-54 years) ; March 2010

Buying intentions = similar expenses

100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles

Households : some obvious observations…



100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles




100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles No kids




100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles No kids




100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles No kids With child. 18+




100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120Singles No kids With child. 18+




100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120

Singles No kids With child. 0-5 With child. 6-11

With child. 12-17 With child. 18+

Households : do not explain everything…



100

Positive

financia

l situ

ation

Positive

feelin

gs

Positive

attit

udes

Prefe

rence

rate

of

A

-bra

nds

Current p

urchase

s

Leisure

Personal e

quip.

Household

equip

.70

80

90

100

110

120

SG 1-4 SG 5-8

Social groups : completely different consumers !



100

20 40 60 80 10020

30

40

50

60

70

80

SG 1-4 : more ‘good’ spendings in FMCG

SG 1-4 SG 5-8

% preference rate of A-brands

% s

imila

r ex

pen

dit

ure

s

Food


Drinks Housecare

HygieneFood

Drinks Housecare

Hygiene

What does today’s

shopper expect ?

Some strategies analysed in Fact…

Your customers

PRICEPragmatic strategies

BRANDProgressive strategies

RETAILInstore strategies

WORD OF MOUTH

Strategies of membership

PRODUCTStrategies of the

offer

To preserve the purchasing power

To show oneself skilled and/or responsible

To provide satisfaction and

pleasure

1. PRICE sensitivity

40%

51%

57%

25%

20%

19%

35%

29%

24%I always look for

products in promotion

without opinion

National universe ; PRP 18-54 years ; May 2009 & March 2010

I collect coupons & participate to contest

actions

I look as much as possible for cheaper

products

I do not pay attention to in-store promotions

I have neither the time nor the desire to collect coupons & participate…

I’m very critical towards cheap products because…

UP in 2010

(48% in 2009)

(38% in 2009)

(53% in 2009)

A- brands Brand lovers

loyal to favourite

brandLoyal

shoppers

purchase in

promotion

Good deal shoppers

try different brandsZappin

g shoppe

rs

Preference in terms of types of products

(A-brands, Private labels, White products)

Types of shoppers amongst

brand lovers


loyal shoppers

A-brands, PRICE sensitivity and loyalty

National universe ; base = total PRP 18-54 years ; average 40 FMCG categories ; March 2010

promo purchase &

cheapest shop

Price hunters

No promo purchase, no

cheapest shop

Price unsensitive

60% brand lovers

42% Loyal

shoppers

(70% brand lovers)

21% Good deal shoppers (50%

loyal)

3% Shop hunters (7% loyal

)

10%

Zapping

shoppers

(17% brand lovers)

Preference in terms of types of products

(A-brands, Private labels, White products)


brand lovers


loyal shoppersNational universe ; base = total PRP 18-54 years ; average 40 FMCG categories ; March 2010

8%

Price hunters (19% loyal)

10%

Price unsensitive

(24% loyal)


National universe ; base = total PRP 18-54 years ; average 40 FMCG categories ; March 2010


Loyal brand lovers

76% « price sensitive »

Brand lovers

67% « price sensitive »

2. PRODUCT attractivity

19%

32%

41%

25%

25%

23%

56%

43%

36%

without opinion


I’m very attentive to

the composition of products

I buy products without looking at their composition in detail

I am ready to pay more for products recommended for

health

The consumption of products « good for health » is only a sellling argument

I am attracted by “amazing” products

(ingredients, new form of packaging, etc)

I especially pay attention to the practical aspects of the products

3. BRAND promises

29%

31%

33%

37%

33%

33%

27%

27%

38%

36%

40%

36%

without opinion

Durable development is only a fashion phenomenon

I’m ready to pay more for durable

products

I’m ready to pay more for products

from socially responsible …

I’m not sensitive to the manufacturers’ reputation in terms of social responsibility


I prefer to buy A-brands because they

invest in product innovation

I prefer to buy A-brands because they have more

know-how & experience in the manufacture of products

I’m not particularly interested in everything new

I’m equally confident about the private labels’expertise in the manufacture of products

(40% in 2009)

(33% in 2009)

DOWN in 2010

DOWN in 2010

Look

for c

heap

er p

rodu

cts

Look

for p

rodu

cts in

pro

mot

ion

Attrac

ted

by a

n in

-sto

re p

rom

otio

n

Colle

ct co

upon

s

Prom

o sh

oppe

rs

Good

deal

shop

pers

Shop

hunt

ers

Price

hunt

ers

Compo

sitio

n of

pro

ducts

Produ

cts re

com

men

ded

for h

ealth

"Am

azin

g" p

rodu

cts

Attrac

ted

by a

new

varie

ty

Durab

le p

rodu

cts

Know-h

ow A

-bra

nds

Socia

l res

pons

ibilit

y

Inno

vatio

n A-b

rand

s70

80

90

100

110

120

Brands’ strategies overview


100

Price sensitivity (general)

A-brands & price sensitivity

Product attractivity

Brand’s promises

Look

for c

heap

er p

rodu

cts

Look

for p

rodu

cts in

pro

mot

ion

Attrac

ted

by a

n in

-sto

re p

rom

otio

n

Colle

ct co

upon

s 70

80

90

100

110

120

SG 1-4 : more inclined to consume !


100


SG 1-4

SG 5-8

Look

for c

heap

er p

rodu

cts

Look

for p

rodu

cts in

pro

mot

ion

Attrac

ted

by a

n in

-sto

re p

rom

otio

n

Colle

ct co

upon

s

Prom

o sh

oppe

rs

Good

deal

shop

pers

Shop

hunt

ers

Price

hunt

ers

70

80

90

100

110

120



100



SG 1-4

SG 5-8

Look

for c

heap

er p

rodu

cts

Look

for p

rodu

cts in

pro

mot

ion

Attrac

ted

by a

n in

-sto

re p

rom

otio

n

Colle

ct co

upon

s

Prom

o sh

oppe

rs

Good

deal

shop

pers

Shop

hunt

ers

Price

hunt

ers

Compo

sitio

n of

pro

ducts

Produ

cts re

com

men

ded

for h

ealth

"Am

azin

g" p

rodu

cts

Attrac

ted

by a

new

varie

ty 70

80

90

100

110

120



100




SG 1-4

SG 5-8

Look

for c

heap

er p

rodu

cts

Look

for p

rodu

cts in

pro

mot

ion

Attrac

ted

by a

n in

-sto

re p

rom

otio

n

Colle

ct co

upon

s

Prom

o sh

oppe

rs

Good

deal

shop

pers

Shop

hunt

ers

Price

hunt

ers

Compo

sitio

n of

pro

ducts

Produ

cts re

com

men

ded

for h

ealth

"Am

azin

g" p

rodu

cts

Attrac

ted

by a

new

varie

ty

Durab

le p

rodu

cts

Know-h

ow A

-bra

nds

Socia

l res

pons

ibilit

y

Inno

vatio

n A-b

rand

s70

80

90

100

110

120



100




Brand’s promises

SG 1-4

SG 5-8

Quality is more essential than ever !

7%I pay less attention to quality if it makes a difference in the

wallet

16%I often choose less expensive

things even if their life expectancy is shorter

30%I prefer to buy less than

to loose quality

Current purchases

Equipment

National universe ; 18-54 years ; March 2010

19%

39%

22%

26%

59%

35%

National universe ; PRP 18-54 years ; March 2010

Word of mouth or personal experience ?

I recommend the products that I find

very good & disadvise those…

I don’t bother people with my good or bad experiences of products

I often listen to the advice of my peers for the choice of a

brand

According to my personal experience, I’m used to decide by myself about the brand I’m going to buy

without opinion

Conclusions

Crisis led to a change New standards

Belgian shoppers & A-brands The love story continues… But loyalty is more fragile…

Let us be optimistic ! Gap between intentions & final expenditures Consumers with financial means & convictions

The gap does not have to grow ! Let us talk to the right target … with the right words

Conclusions

Business

The impact of crisis on purchasing intentions