U.S. Consumers Cut Take-out as Belts Tighten: ACNielsen Study

NEW YORK -- When the going gets tough, Americans stop going for take-out, according to a new survey conducted by ACNielsen.

The aversion to take-out as belts tighten is apparently a distinctly American phenomenon, according to the world's leading market research and information company, which studied consumer patterns worldwide. In the United States, unlike most markets surveyed, consumers cited cutting down on take-out meals as their most popular cost-cutting method. Just over half of all respondents (57 percent) worldwide claimed they would cut down on out-of-home entertainment, and spend less on new clothes (53 percent) to stay within their budgets, with nearly half (48 percent) also saying they would delay upgrading technology to tighten their belts.

The survey, conducted in November 2005, polled more than 23,500 respondents -- regular Internet users -- in 42 markets.

In the U.S., where the economy remains fairly robust and unemployment is low but median wages are flat, consumers seem not to be employing cost-saving strategies to a large degree; or if they are, are spending the saved funds almost immediately. In fact, earlier this year, the U.S. Commerce Department reported that American consumers spent more than they earned in 2005 for the first time since the Great Depression.

Across the five regions surveyed, consumer priorities varied, most notably in North America. While out-of-home entertainment was the first thing consumers would cut down on in Latin America (61 percent), Asia Pacific (58 percent) and Europe (54 percent), in North America, the first thing to go for 70 percent of Canadians and 66 percent of Americans would be the take-out meals, ahead of out-of-home entertainment, which ranked second. Moreover, North Americans cited 'trying to save on gas and electricity' as their third preferred cost-saving measure.

"To a degree, belt-tightening strategies are a reflection of lifestyles in each region, and the potential for where the biggest saving can be made," said Tom Markert, chief marketing officer, ACNielsen. "It also reflects priorities -- where consumers will look first to cut back, and also where they are not prepared to make concessions. In the U.S., the enormous amount of take-out food we consume, the billions we spend on out-of-home entertainment and as the world's largest user of energy, these three areas may be the big budget numbers that can be reduced without too much lifestyle compromise. Based on the country's negative national savings rate, however, any money saved by US consumers is probably simply spent in other areas."

ACNielsen pointed to two findings of particular interest to U.S. food retailers and manufacturers of consumer packaged goods business. First, when asked if they would switch to cheaper grocery brands, 42 percent identified it as a cost saving strategy. Not surprisingly with the rising power of hard-discount retailers in Europe, European consumers scored the highest in this area (France 57 percent, Portugal 52 percent, Austria & the Netherlands 51 percent); but the U.S. just missed cracking the top 10, and was well above the global average of 35 percent. Second, the U.S. was the clear leader in identifying the use of coupons as a cost-saving strategy at 46 percent, far ahead of the global average of 19 percent (see Table 2 for a complete list of US responses versus global averages).

"We believe the strong numbers in the 'cheaper grocery brands' response is clearly tied to the rise of private label goods throughout the U.S. and the world, both in terms of amounts spent and categories now included," noted Markert. "I believe the US will crack the top 10 in this area in the not too distant future, especially if some of the hard discounters that have enjoyed so much success in Europe make a bigger push into the US market."
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