Media release
31 July 2009

The Brighter Side Of The Recession

- One in three say spending less is a change for the better -

New Zealanders may be spending less during the recession, but they are spending more wisely according to the Clemenger Group’s New Zealand Recession Monitor.

The quarterly survey of 507 New Zealanders revealed three out of four (74.3%) have reduced spending in some way over the past three months, and 62% plan to further reduce spending over the next three months.

Jim Moser, Clemenger Group CEO says while this might sound like a cause for recession depression, the reality is far from it.

“Nearly one in every three New Zealanders (31%) who has reduced their spending views this as a positive. People are being more budget conscious and basing spend on need and not want,” says Moser.

This return to a simpler life and acceptance we have been living beyond our means were identified by New Zealanders as being changes for the better.

The reduced spending is despite the fact most respondents feel more positive than negative about their future income prospects. Almost two out of three (64%) were unconcerned or neutral when asked how worried they were their income would decrease over the next three months.

“What this tells us is that people are looking more carefully at what they spend even if they aren’t concerned the recession will impact them directly. For brands this means they need to be able to deliver on quality and value more than ever before. If they can do this, and retain a price premium, they will rocket through this recession,” says Moser.

The environment appears to be a beneficiary of the economic downturn too, with those surveyed claiming to be less wasteful, trading goods instead of throwing them away, planting their own vegetable gardens and saving money by using public transport or walking to work.

Cutting back on non-essential groceries and treats at the supermarket, and replacing takeaways and dining out with simple home cooked meals were among the most common cost-saving methods, while some of the more innovative included bulk-buying goods with neighbours.

More than one in five people are looking for coupons in mailers, and one in three are waiting for products to go on sale before purchasing them.

“We are seeing a shift from lazy shopping, which is unplanned and unthinking, to alert shopping which is planned, with a focus on specials and a greater scrutiny of packaging and labels,” says Moser.

The family unit is also proving important as people turn to their nearest and dearest when times are tough. The research revealed that more middle-aged parents are taking in or helping out their adult children and grandchildren while also looking after their own aged parents, and people overall are spending more time at home and with family.

“Every cloud has a silver lining and the same can be said of this recession,” says Moser. “While there is no doubt people are feeling the pinch – and some are really hurting – many are using this recession as an opportunity to re-evaluate their lifestyle and in many cases make changes for the better.”

Other key findings:

• The main areas consumers are reducing, and plan to continue reducing spending in are:
o Non-essential grocery items (treats)
o Personal clothing
o Eating out
o Takeaways

• Some of the ways people are spending smarter include:
o Waiting for sales
o TXTing more and ringing less
o Delaying spending on travel, dentistry and home maintenance unless it’s urgent
o Spending more time at home
o Cooking more, eating takeout less
o Buying fewer clothes and starting fashion swap parties
o Substituting expensive brands for cheaper ones (but not substituting cost for quality, especially when it comes to purchasing for families)
o Getting wiser about shop credit
o Buying from TradeMe and garage sales

Survey Methodology
The research was a combination of focus groups and an online survey and has a margin of error of +/- 5%. The analysis is based on 507 respondents to the survey.

Ends.

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