Consumer spending survey

How has the global financial crisis affected CHOICE members?
 
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02.Saving more and job security

CHOICE members are curtailing unnecessary spending and trying hard to reduce their household expenses.

Of our respondents, 68% have a household budget and the majority are sticking to it mostly, while 54% have actively found ways to reduce their household bills. One big area being targeted is in the weekly shop, with more than half trying harder to reduce their grocery bill compared with the same time last year, and 22% switching to a cheaper supermarket.

There’s been a shift to generic brands since the downturn started: 85% of respondents buy generic products and 25% reported increasing their spend on those items. This is consistent with trends across the economy, as the media reports shoppers are ditching expensive brands, seeking “more for less” and expecting value for money on all purchases.

Members are also looking for ways to cut the cost of non-essentials. International travel, clothes and entertainment top the list of discretionary items being targeted, with more than 40% of respondents cutting expenditure in those areas.

Where you won’t compromise

Thirty-four percent of survey respondents have postponed the purchase of a big-ticket item, such as a TV or fridge, for economic reasons. But 92% will not compromise on the quality of household appliances to save money. Even in a recession, CHOICE members place very high importance on quality as well as price.

Another area where people are reluctant to make changes to save money is on their children’s education – 26% of respondents have children in school, and while we don’t know the ratio of public to private schools, the vast majority have not changed schools to reduce fees, nor do they intend to.

Interestingly, the attitude to childcare is very different. Of the fairly small number of respondents who use childcare, 28% have made a conscious effort to reduce their childcare fees (that’s 4% of all survey respondents). We can only speculate on how they’re making these savings; changing to a cheaper centre or reducing the number of days (whether by choice or having no other option) are likely to be the most common ways to reduce such costs.

Job security

The prospect of losing a job is most people’s biggest fear in a recession and unemployment is on the rise, hitting 5.7% nationally in May – the highest rate since February 2004 and an increase of 1.8 percentage points in 15 months. There’s widespread belief among economists and forecasters that job losses will significantly increase in the next two years. A March 2009 report by Sensis found that unemployment was the single biggest concern for worried consumers.

So how are CHOICE members faring? One of the most interesting findings of our survey is the relatively strong feeling of job security among the majority of CHOICE members – 41% of respondents are “very confident” about their job security, while 45% are “quite confident”.

Job confidence has been increasing in the general population too, after hitting historic lows. The February 2009 Westpac/Melbourne Institute Consumer Sentiment Survey, which measures consumers’ feelings of job security, showed a deterioration of 59% over the previous year and the highest level of job insecurity since the survey began in 1974. However, the general confidence level dramatically increased in March and April.

Four percent of our respondents report having lost their job within the past year, while 7% said that fate had been suffered by someone in their household. Of those in paid employment, 14% report being “not very” or “not at all confident” in the security of their job. Many people are putting in more time and effort at the workplace, with 25% of respondents working longer hours than before for the same amount of pay. One member believes “we should all work harder and be more conscious about the value of honesty, even towards our employer – so no sick leave for [our] own purposes or taking things home that we shouldn’t!”

Five percent of respondents have been forced to manage with lower earnings, as their employer has reduced their working hours through measures such as a four-day working week. Again, some people support such moves. “I would like everybody to take a reduction in work hours to keep other people employed if needed,” said one member.

 

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