Recession ‘still with shoppers’

2010-06-09 00:00

THE key to combating widespread negative consumer sentiment for local businesses lies in offering shoppers value for money and quality.

This is one of the main lessons learnt from the devastating recession, according to Professor John Simpson, the director of the University of Cape Town Unilever Institute of Strategic Marketing.

The KwaZulu-Natal chapter of the South African Council of Shopping Centres recently hosted Simpson in Durban.

Simpson warned retailers that consumers will not simply revert to their “typical behaviour” patterns during the economic recovery.

“Don’t expect consumers to simply revert back to type as the recession fades. Different consumers react very differently to the recession …”

The institute’s research revealed that although many consumers have not lost any income, they still believe that they are experiencing a recession.

About 65% of the research respondents were spending more responsibly in reaction to the national recession.

The research project was known as “Project Reboot”. It explored the effect the recession was having on spending.

Despite a fledgling economic recovery taking hold in recent quarters, persistently high food inflation has — until recently — destroyed the average consumer’s ability to spend.

High household debt levels have not helped the situation and the retail sector has suffered as a result.

Brand loyalty is also under pressure, Simpson warned.

He revealed that the emerging black middle-class segment has weathered the recession remarkably well.

“They fuelled the previous boom between 2001 and 2007. This is the future growth sector of the economy … and this segment has proved to be very resilient despite the recession. They’ve learnt very quickly how to manage their money and lifestyles.”

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