TORONTO--(Marketwire - May 3, 2010) - While continuing to spend with caution and prudence, Canadians are more confident about the economy and its prospects than U.S. residents and Europeans, according to a new report from The Boston Consulting Group, "The New World Order of Consumption" which is based on a global survey of consumers fielded last month.
"Canadian consumers believe the worst of the recession is over and are more optimistic than they were a year ago. In fact, they're significantly more confident about the economic future and their jobs than consumers in other Western economies. Nonetheless, Canadians clearly are not forgetting the lessons of the recession. While belt-tightening is lightening up a bit, Canadians have structurally changed the way they spend and consume: It's much more focused on price, and there's much more thought given before expenditures on non-essential items," said Cliff Grevler, a partner in the Toronto office, and leader of the Canadian Consumer Practice.
Some Canadians are Beginning to Take the Brakes off Spending
- A year ago, most Canadians (53 percent) said they planned to cut discretionary spending. Today, only 43 percent are planning cuts.
Nonetheless, the Lessons of the Great Recession will Stick in Canada: Structural Changes in Consumption
- Three-quarters (74 percent) of Canadians say they are now spending more time shopping around for better prices.
- Six-two percent are more often shopping at discounters.
- Sixty-one percent are checking prices on the Web more often.
- Fifty-seven percent are buying more private label goods.
- Seventy-three percent plan to buy more products on promotion.
- Fifty-five percent of Canadians still plan to cut spending non-essential items (versus 65 percent of U.S. residents).
Yet Canadians' View of the Economy is More Positive than Others'
- Only 18 percent of Canadians do not think the economy will improve in the next six months. (A year ago, most Canadians -- 52 percent -- thought it would not improve in six months.)
- Meanwhile, 37 percent of U.S. residents and 39 percent of European Union (EU) residents do not think the economy will improve in the next six months.
A Reason for Canadians' Relative Optimism: Greater Sense of Job Security
- While a whopping 29 percent of U.S. residents and 28 percent of EU residents say they currently feel insecure in their current job, only 13 percent of Canadians express a sense of job insecurity.
In Fact, Canadians Believe They're Better off than the U.S. Residents
- 70 percent of Canadians said they're currently better off than their brethren in the U.S.
"While Canadians have some very legitimate reasons to be a bit more sanguine about the economy and its prospects than U.S. residents and Europeans, the measure of caution among Canadian consumers is wise. While the worst of the recession is likely over, we're not out of the woods yet. Unemployment is still high; consumer debt, including credit card debt, is still high, with the debt ratio to disposable income still over 100 percent. And the structural changes in the way Canadians spend is likely to slow the pace of economic growth," said Mr. Grevler.
About the Survey Methodology
This Household Spending survey on Canadian consumers' sentiment and spending behavior was conducted online by Research Now on behalf of BCG through early April 2010. The survey focused on 1,000 adults aged 18 and older who do the majority of shopping for their household. A similar version of the survey, fielded at the end of December 2008, was conducted in the United States and Europe, providing basis for comparison.
References to "consumers" reflect respondent samples of adults aged 18 and older with a household income of more than $50,000 who conduct at least half of the shopping for their household. These consumers represent more than 75 percent of Canadian household spending.
All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of errors that are most often not possible to quantify or estimate. These include errors associated with sampling, coverage, nonresponse, wording of questions and response options, and post-survey weighting and adjustments. The margin of error for this survey is as high as 3.8 percent. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100 percent response rates. These are only theoretical: no published polls come close to this ideal.
Respondents for this survey were selected from among those who had agreed to participate in Research Now surveys. The data have been weighted to reflect the composition of the Canadian adult population. Because the sample is based on those who agreed to be invited to participate in the Research Now online research panel, no estimates of theoretical sampling error can be calculated.
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 69 offices in 40 countries.