“Feeling Insecure, Consumers Stick to Frugality”
In a November 18, 2010 report from Reuters, Booz & Company Principal Marcelo Tau (North America) said that U.S. consumers are sticking to the frugal spending habits they adopted at the beginning of the economic crisis in 2008 because they lack confidence that an upswing is coming any time soon. Tau was referring to Booz & Company 2010 U.S. Consumer Survey, which revealed high levels of uncertainty about the economic situation and the impact it will have on shopping habits. “The uncertainty is still here,” said Tau. “People are not confident. They are not expecting a big change in the coming year. Last year we found that almost 30 percent of people thought they’d be better off. This year it’s 14 percent.” The Booz & Company survey revealed that frugal spending habits are more likely to persist in categories where consumers felt unpunished in terms of quality by purchasing a less expensive brand. “What we’ve seen happen in some categories is that people realize there is not much difference in some areas—garbage bags, for example,” Tau added. “People realize that there is not much reason to spend more for a very similar product.”