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Credit crunch report - Market Research report into consumer opinions about the recession
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(1)
Credit Crunch Tracking
February 2010
The Road to Recovery?
(2)
Substantial increase is seen in consumer confidence – the highest in the past year!
But we remain cautious about increasing our spend – waiting to see if the recovery is permanent.
On the Road to Recovery...?
(3)
Consumers believe the Irish Economy is improving.
(4)
Highest expectations in a year!
1 in 5 now expect the economy to improve, while half expect it to stay at least unchanged.
But half still expect the Irish economy to fare worse over the next 6 months!
2938 39 32
35
5440 41
29 17
8 9 718
21
1 1 1
21
Much better (5)
Much worse (1)
Average
Stay the same (3)Slightly better (4)
Slightly worse (2)
1.92
12
1.70
7
1.88
11
2.32
18
NET Same/Better (3-5) 2216 19 38
How do you expect the Irish economy to fare in the next 6 months?
May‘09%
July‘09%
Oct‘09%
Feb‘09%
2.54
26
48
Feb‘10%
(5)
Higher expectations seen among the youth, the retired and those born outside of Ireland.
(6)
Expectations for the Irish economy 6 months from now % Stating they believe it will be the same or better (3-5)
48 4947
53
4542
5148 47 47 48
46
57
18-34%
35-44%
45-64%
AGE
65+%
Any%
None%
CHILDREN
Male%
Female%
GENDER
ABC1%
C2DE%
SOCIALCLASS
TOTAL%
COUNTRY OF ORIGIN
Ireland%
Other%
(7)
A positive outlook for the World economy, is driving the Irish outlook.
(8)
38 33 3421 17
33
15 11
85
1431 31
4453
1
3 2
55
Much better (5)
Much worse (1)
Average
Stay the same (3)
Slightly better (4)
Slightly worse (2)
NET Same/Better (3-5)
2.72
16
2.11
12
2.77
18
3.18
19
5027 51 68
How do you expect the World economy to fare in the next 6 months?
May‘09%
July‘09%
Oct‘09%
Feb‘09%
3.36
20
78
Feb‘10%
3 in 5 now expect the World economy to improve 6 months from now!
Only 1 in 5 expect the World economy to worsen over the next 6 months.
(9)
Expectations are also increasing for housing and job market…but many still fear it may get worse
(10)
3544 40 37
35
2437 38 36
39
43 21 22 19 13 6342 40
28 21
1515
3 7 712 12
22
2 1
711 12 11
11
2 2Much better (5)
Much worse (1)
Average
The Housing Market 6 months from now?
Job security 6 months from now?
2.29
Stay the same (3)Slightly better (4)
Slightly worse (2)
1.85
20 11
1.86 1.53
13 7
2.32 1.89
23 14
2.43
26
2.24
20
NET Same/Better (3-5) 33 1921 1037 2243 34
2.59
36
53
2.34
27
40
May‘09%
July‘09%
Oct‘09%
Feb‘09%
Feb‘10%
May‘09%
July‘09%
Oct‘09%
Feb‘09%
Feb‘10%
How do you expect the Housing and Job markets to fare in the next 6 months?
(11)
The expected tough budget did not materialise for most consumers, reducing the perceived impact of the recession on them personally
(12)
14 22 2839 29 47 31
1610
1411
191624
High impact (8-10)
Limited Impact (1-3)
Expected Personal Impact of Recession - Overall
Average
July‘08%
5.7
May‘09%
5.8 6.6
Feb‘09%
5.1
Sept‘08%
6.1
July‘09%
7.0
Oct‘09%
Some Impact (4-7) 60 58 51 48 55 44
6.0
Feb‘10%
53
But 1 in 3 still expect to be heavily impacted by the recession!
(13)
4743
49 49
55
45
30
44
4951
43
31 30 31 3230
34
21
26
3634
28
18-34%
35-44%
45-64%
AGE
65+%
Any%
None%
CHILDREN
Male%
Female%
GENDER
ABC1%
C2DE%
SOCIALCLASS
Expected Personal Impact of Recession – Net High Impact (8-10)
TOTAL%
The biggest change in impact appears to be among middle class families, who have become far less negative about the impact of the
recession
(14)
The percieved impact on monthly spending, lifestyle and job security also decline with increased optimism.
(15)
18 24 28 36 30 43 3113
21 2131 24 38 26
19 2316
21202124
35
1518
162120
28
Monthly Spending
Average
Your Way Of Life
5.6 5.35.7 5.46.2 5.95.0 4.65.9 5.66.7 6.4
High impact (8-10)
Limited Impact (1-3)
Some Impact (4-7) 54 5348 5641 4953 5051 5541 45
July‘08%
May‘09%
Feb‘09%
Sept‘08%
July‘09%
Oct‘09%
July‘08%
May‘09%
Feb‘09%
Sept‘08%
July‘09%
Oct‘09%
5.9
49
Feb‘10%
5.6
51
Feb‘10%
Expected Impact of Recession on….
(16)
1824 23
3224
3124 21 26
32 34 30 4635
4027
1925283035
4226
3727
383651
Average
Full-time Workers Part-time Workers
5.0 5.14.7 5.45.6 5.74.1 4.54.9 6.55.6 5.7
High impact (8-10)
Limited Impact (1-3)
Some Impact (4-7) 39 3637 3840 3629 3638 4440 34
July‘08%
May‘09%
Feb‘09%
Sept‘08%
July‘09%
Oct‘09%
July‘08%
May‘09%
Feb‘09%
Sept‘08%
July‘09%
Oct‘09%
4.7
34
Feb‘10%
5.7
34
Feb‘10%
The perceived impact on job security also improves, but the fear of job loss remains...
(17)
It appears that a large proportion of consumers do have the household income to potentially resume some spending.
(18)
34 36
1720
33 26
16 18
Concerns About The Future
Lower Prices/Cost-of-Living
Not Reduced Spending
Lower HouseholdIncome
Suggests that income is available for improved
spending when consumers feel more
secure!
Main reason for reducing spend to date, if at all...
Oct 2009%
Jan 2010%
Only a third have reduced spend due to
lower household income
(19)
%
37
37
22
44
37
35
40
32
36
C2DE
Males
Females
18-34
45-64
35-44
65+
ABC1
Age
SocialClass
Sex
TOTAL
Reduced spend due to lower income...
Women and the 45-64 year olds are more likely to have decreased their spend due to lower income – suggesting men and those in the older and youngest age groups are most likely to start spending again first.
(20)
However, in spite of the most positive outlook in a year, on the whole consumers are as yet reluctant to increase their spending.
(21)
63 64 63 67 68 65 62 64
13 12 11 8 12 1320 16
19 18 1916
16 1613 15
4 6 57 3 4
3 5Already increased
Not likely to increase
Entertainment such as going out, eating, drinking or
socialisingGrocery spend
Consumer goods and services – e.g.
hairdresser, clothes, mobile
phone, gaming etc.
Holidays and short
breaks
Likely to increasein next 6 months
Likely to increasein next 12 months
Oct‘09%
Feb‘10%
Oct‘09%
Feb‘10%
Oct‘09%
Feb‘10%
Oct‘09%
Feb‘10%
Likelihood to increase spend in...
Some small shifts in increased spending have already occurred, but the majority remain reluctant to increase
(22)
% Likely to increase spend in next 12 months
EntertainmentGrocery Spend
Consumer Goods/
Services
Holidays/ Shorter Breaks
Total 35 32 34 35
Gender
Male 36 30 33 36
Female 35 32 34 34
Age
18-34 50 39 45 46
35-54 31 31 32 31
55-64 20 18 30 28
65+ 22 25 26 26
Social Class
ABC1 36 31 34 39
C2DE 33 32 34 31
But, younger age groups and higher social classes are most likely to increase spend again...
(23)
Summary...
• Highest consumer confidence in a year suggests that consumers feel that we are on the way to recovery.
• But consumers are reluctant to increase spend – until they feel the recovery is permanent.
• The research suggest that a large proportion of consumers will be in a position to increase spend however, once they believe the recovery is permanent.
(24)
Summary...
• It is crucial that the high consumer optimism is enforced rather than reversed by policy makers – this could ultimately drive Ireland out of the recession.
• Young consumers are most likely to increase spend and have the highest confidence in a recovery – this should be the starting point of marketeers.
(25)
Methodology – RED Express
• 1,000 telephone interviews (CATI) using a random digital sample to ensure coverage of all households, including ex-directory.
• Quotas were set and data weighted to ensure a national representative sample of the population aged 18+ years.
• This is the 7th wave of the credit crunch tracking – fieldwork was conducted 8th-10th February.