‘New’ US shopper to emerge from crisis

As the recession dramatic­ally alters where and how Americans spend their money, there is an emerging consensus on the likely profile of the “new” US consumer who will emerge on the other side of the crisis.

A Citigroup report, for example, argues that US consumers are shifting towards “conscientious consumption”, embracing a “thriftiness” focused on value and quality, not quantity.

Euro RSCG, the global advertising group, says a recent survey of 500 people in the US, the UK and France pointed to a shift to “value” combined with a desire for “voluntary simplicity”. And consumer anthropologists suggest Americans will seek to “un-stuff” their lives, and focus more on the community.

Andrew Benett, of Euro RSCG Worldwide, says the changes are likely to be long-lasting. “I don’t think we are going to go back to the behaviours of the past, which were about excess and not thinking things through…we have moved on as consumers.”

The behavioural changes have included cutting back on “aspirational” luxury shopping. People are using cash and debit cards more than credit, while favouring lower-cost stores such as Wal-Mart and Costco. At supermarkets, well-known national brands have lost ground to retailers’ lower-cost own-brand products.

A survey carried out in October and November by TNS, the market research group, also found the frugal mood had affected US consumers who do have the money to spend – with families earning more than $100,000 using discount coupons more often and seeking out money-saving offers.

Joan Lewis, head of consumer and market research at Procter & Gamble, the world’s largest consumer products company, says there is a remarkable consistency in these shifts, in both developed and developing markets. “We think that many of these changes we have seen will remain for a long time,” she says.

In the US, tighter limits on consumer credit will underpin behavioural shifts. A recent survey of 5,000 US consumers by Alix & Partners predicted that post- recession spending would go back to just 86 per cent of pre-recession levels: about a 10 per cent drop in spending, or a $1,000bn (€760bn, £680bn) annual reduction.

Ed Kerschner, chief investment strategist at Citi Global Wealth Management, says the US has passed an “inflection” point, marking the end of an acceptance of conspicuous consumption that he traces back to the Reagan presidency of the early 1980s. The end of easy access to consumer credit will, he argues, lead to “thriftiness” focused on “value”, rather than “frugality” focused on low prices.

“It’s going to be about thrift…it’s not about being frugal or cheap,” he says.

Context-Based Research, which sent its cultural anthropologists out to US cities in December, said it heard consumers talking of “community”, “hard work”, and “taking responsibility”.

Robbie Blinkoff, Context’s principal anthropologist, says he expects to see the emergence of a new “reflective consumerism”.

He also says it is still hard to gauge the inevitable impact of the recession on young people. “When I pull out a credit card, my eight-year-old daughter says, “you are using debit, not credit, right, Dad?” It’s funny. But that will stick with her for the rest of her life.”