Hoorah! We’re still alive! This was the message of a recent news commentary on the financial crisis. It asserted, along with many other forms of media, experts and most of all, consumers, that the upturn is on its way. But when? The ifo business climate index has, after all, risen for the third time in a row, the consumer climate improved in June and people can even gain something positive in times of crisis.
If Germans are asked explicitly for positive consequences of the crisis, almost a third will have an answer, according to a survey carried out by GfK Marktforschung for the GfK Association. Around 31% are of the opinion that the current difficulties have brought positive effects. Within this group, 12% believe that the crash has brought an opportunity for a new start. A similar number believe that people will be more careful with their finances in future. And 14% believe that it has taught a moral lesson for consumers to have humility in the future. In second place is the effect on the purse, rather than morality. Almost 20% of those people, who believe every cloud has a silver lining, expect reduced consumer prices and look forward to good deals.
Prices are actually falling, as shown by the Consumer Index managed by GfK Panel Services. Since January 2009, prices paid by consumers in food retail have regularly been below the average year on year. Discount stores have special offers, and models such as the scrappage scheme, no longer to be found exclusively in the car industry, are enticing many consumers.
The euphoria over low prices is equal to the hope that this crisis will be the last, and this is not only because money has been lost, as is the case for a fifth of those surveyed. Worries are putting people under pressure. “I worry more about the future now than before.” 18% of those surveyed agree strongly with this statement and a further 36% at least partially agree. Uncertainty differs according to individual financial situations. Of those who have little or no need to budget, only around a third is a little uncertain. Those who have lost their jobs or are threatened with losing them are more uncertain. Only around 12% of consumers are completely relaxed about the future.
Therefore, some would like more control to be exercised over the financial markets, and the majority of consumers believe that the crisis could lead to stricter regulations. Almost 70% of all the respondants surveyed think that Germany will see more stringent monitoring. Among those who believe in the positive consequences of the crisis, the topic of transparency takes first place in the ranking. Nearly a quarter believe that the crash will have the advantage of bringing more transparency to the market.
Consumers are concerned about the personal consequences of the crisis as well as those affecting society as a whole. In future they plan to look more closely, to compare and examine. A significant majority intends to compare prices more thoroughly than before, with 85% planning to do this on future trips to the supermarket, department store, etc. A similarly high number of consumers intends to research more thoroughly before buying.
A further two thirds of those surveyed intend to make more effort to buy local products. The survey has also shown that larger purchases are not completely off the menu following the crisis. Overall, almost 40% are not putting purchase plans on the back burner; however, the figures vary strongly according to the respondents’ level of financial freedom. Of those who have relatively unlimited resources, two thirds will not be changing their buying behavior, while at least 80% of those with strong limitations are postponing larger purchases for the time being.
Purchases are also being made with the future in mind. Value-retaining products are currently popular despite, or perhaps because of the trend, according to the survey. Almost half of consumers intend to buy such products in future.
The good image of companies is also significant. Around half of all respondents intend to buy from companies that are socially committed. But consumers are also feeling an obligation themselves, with around 20% planning to donate more to local community projects; the figure for financially well-placed people is only slightly above average.
However, this group will save significantly less on going out. Around 80% do not intend to curb their out-of-house activities, while only 30% of lower earners say the same. A third of all respondents also plan to make their houses more comfortable and to invest a little more in having a pleasant home, which will make the crisis more bearable until the upturn finally occurs.
Data source: GfK Association (Omnibus survey, May/June 2009).
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