Nielsen: Slump likely to have serious impact on lifestyle of consumers
By
Michelle Tay
About half of Singaporeans surveyed said they will switch to cheaper grocery brands. They are also likely to cut down on out-of-home entertainment. -- ST PHOTO: CAROLINE CHIA
CONSUMER confidence in Singapore has sunk to its lowest level in more than three years as the economy enters its first technical recession since 2002, a survey has found.
The Nielsen Company, a marketing and media information firm, said yesterday that Singapore's consumer confidence index is at the lowest level of 92 points since it started the twice-yearly survey in the first half of 2005.
'Staycations' - a term coined in the US meaning staying at, or near, home on vacation - seem to be catching on here too, as hard economic times have led to job cuts.
Readings are based on a series of questions to consumers, with a maximum possible score of 200 points. In contrast, exactly one year ago, consumer confidence here was at an all-time high of 114 points.
In August, it had registered its first drop of 12 points, to 102. The latest drop of 10 points marks the second double-digit decline in consumer confidence here this year.
'For global consumers, the last 12 months have been challenging and turbulent - Singapore is no exception with an economy that is closely intertwined with the world's demand,' said Ms Vicky Santos, executive director of The Nielsen Company Singapore.
Nielsen polled over 26,000 consumers in 52 countries, including 500 Internet users in Singapore, in September and last month.
Singapore's economy shrank for a second straight quarter in the three months to Sept 30 as a slowdown in the United States, Europe and Japan reduced demand for the nation's exports.
Compared to previous downturns, the turmoil this time is likely to have a serious impact on lifestyle and cultural factors of consumers, said Nielsen.
'Staying In has become the new Going Out for a new breed of credit-crunch consumers,' said Ms Santos.
Indeed, 'staycations' - a term coined in the US meaning staying at, or near, home on vacation - seem to be catching on here too, as hard economic times have led to job cuts.
Singaporeans, avid travellers who still want to enjoy the annual overseas trip, have ranked spending on holidays second on their list of things to do if they had extra cash to spend.
Instead, seven out of 10 surveyed said they would put the cash into their savings.
The survey also found that about six out of 10 Singaporeans will spend less on clothes, as well as save on gas and electricity, to cope with the rising cost of living in the coming months.
A clear indication that extravagant spending sprees are not on the cards this Christmas season: Nearly half of respondents described their personal finances as 'not so good' or 'bad'.
About half will also cut down on out-of-home entertainment, switch to cheaper grocery brands and put off upgrading their technology gadgets.
When contacted, Sheng Siong Supermarket, which prides itself on selling groceries and fresh produce at lower prices, said its 'sales turnover has achieved positive, steady year-on-year growth' in the last two months.
Its 'performance shall remain steady' despite rising food prices and uncertain market conditions, said its spokesman.
Mr Jimmy Fong, chief executive of EpiCentre, which sells Apple computer products, said: 'We are still cautiously optimistic about bringing in more sales in the Christmas season.
'We are doing all we can to provide more delightful customer service and more bang for the buck.'
