Consumers around the world are likely to spend more cautiously in the coming months amid political and economic uncertainty, according to a new report that surveyed shoppers in 64 countries.
Shoppers said they have cut back on clothing and entertainment costs in the past year, and have taken measures to save on gas and electricity, according to the Conference Board Global Consumer Confidence Survey, conducted in collaboration with Nielsen. Consumers in Europe and Latin America are buying cheaper alcohol and groceries, while Asian shoppers are scaling back their annual vacations.
“There’s a wait-and-see attitude," said Denise Dahlhoff, senior researcher for consumer research at The Conference Board, which surveyed 32,000 online shoppers worldwide. “Consumers are taking note of what’s happening around them and are adjusting their attitudes and behaviors. They’re playing it safe.
Consumers in more than half of the 64 countries surveyed said they expect economic conditions to worsen in the coming year, the survey found. Uncertainty over international trade negotiations, as well as Brexit and whatever President Trump might do or say next have taken a toll on how much people plan to spend, particularly in North America and Europe, Dahlhoff said. Overall, the Global Consumer Confidence Index slipped one point to 106 in the first quarter of 2019.
“Despite the high levels of confidence globally, consumers in different markets have different views about where the economy is heading in 2019,” said Bart van Ark, global chief executive of The Conference Board. “The majority of global consumers do not expect conditions to become more favorable over the next twelve months."
But, Dahlhoff said, a pullback in consumer spending could be an opportunity for certain types of businesses to win over new shoppers. Retailers like TJ Maxx and Burlington Coat Factory flourished during the last economic downturn, and have continued to draw consumers who want to feel good about scoring bargains.
The $24 billion second-hand clothing market, meanwhile, is expected to double in the next five years, as younger shoppers look for ways to save money and reduce waste, according to retail analytics firm GlobalData.
“People are not averse to spending if they see value and benefits," she said. “The second-hand clothing market is growing tremendously. Private-label brands are gaining acceptance. There is room for companies to play around with new ideas.”
According to the survey, consumer confidence in the United States remained unchanged during the first quarter. In Europe, confidence levels declined after peaking in late 2017. Consumer confidence levels were the lowest in South Korea, Russia and Italy.
There were, however, some bright spots, particularly in emerging economies. Consumer confidence in the Asia-Pacific region remained at a historic high, driven by strength in India, Indonesia and Philippines. “Spending intentions have moderated in North America and Europe, but increased in Asia-Pacific,” the report said.
And even though consumers said they planned to spend less in the coming year, they remained largely optimistic about job prospects and personal finances in the coming year. Nearly 60 percent of those surveyed said they felt “excellent” or “good” about their employment situation, while 63 percent said they had a positive view of their personal finances.
“The picture is mixed,” Dahlhoff said. "Consumers may be feeling good about their personal financial situation, but they are not quite sure what’s on the horizon.”