TORONTO--(Marketwire - Aug 18, 2011) - Canadian consumers are feeling uneasy in the wake of recent global economic turmoil. Their already conservative mindset is being reinforced, resulting in increased financial insecurity and continued intentions to cut spending, according to a new survey of 1,000 consumers conducted earlier this week by The Boston Consulting Group (BCG).
Although the Canadian economy has been faring relatively well over the last several quarters, the recent volatility in local and global stock markets has created increased feelings of financial insecurity among Canadians. A third of Canadians (33 percent) surveyed by BCG are currently feeling financially insecure or in financial trouble, up 8 percentage points since the springtime (March). The stock markets' gyrations are also impacting how consumers intend to spend over the coming months, with 42 percent stating that recent stock market events will cause a reduction in their spending plans.
"Canadian consumers are already burdened by high debt levels and feelings of financial insecurity. Last week's volatility in the stock markets only exacerbated the situation," said Cliff Grevler, a partner in BCG's Toronto office.
Canadians are reacting to this increased insecurity and conservatism by continuing to adjust their spending behaviors. They are cutting spending on non-essential items and buying more products "on deal," Grevler said.
"Women are bearing the brunt of this uncertainty. They are more likely than men to feel financially insecure, and plan to cut back more drastically than their male counterparts. We also know that women control over 70 percent of household spending in Canada," he said.
As kids get ready to return to the classroom, this conservative sentiment is also affecting Canadians' intended back-to-school spending, with 45 percent of consumers planning to decrease their spending compared to last year's season.
Among the survey's other key findings:
Financial insecurity is increasing rapidly across all segments of Canadian consumers
- Levels are highest in Atlantic and Quebec, where 43 percent and 37 percent of consumers feel financially insecure, respectively
- The results are consistent with macro economic data and trends (e.g., high debt levels, financial vulnerability, etc.)
The bargain-hunting mindset is poised to continue, with consistent results in future shopping intentions
- 60 percent plan to significantly cut spending on non-essential items
- 69 percent plan to defer major expenses that can wait
- 72 percent plan to pay more attention to/buy more products on promotion
As before, women continue to bear the brunt of the downturn
- Women are feeling more financially insecure (38 percent vs. 29 percent for men)
- Women are more likely to decrease spending (47 percent vs. 38 percent for men)
- They are more likely to pursue bargain hunting behavior (+8-14 pts vs. men)
To arrange an interview with a BCG expert, please contact Alexandra Corriveau at +212 446-3261 or corriveau.alexandra@bcg.com.
About the Survey Methodology
The Canadian Consumer Economy Pulse Check survey was conducted online by BCG on August 15 and 16, 2011. The survey focused on about 1,000 adults from across the country, ages 18 and older, who regularly participate in shopping for their household and are in the top three income quartiles. The margin of error for this survey was up to 3.8 percent.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com.