ACNielsen Global Survey Finds U.S. Consumers Still Among Most Strapped for Cash

Almost One-Quarter of U.S. Consumers “Have No Spare Cash”

U.S. Tied For #1 in the World, but Situation Improving

  
Schaumburg, Ill. – 24 January 2006 – The United States and Portugal top 42 markets for the most cash-strapped consumers according to a recent global online survey from ACNielsen, the world’s leading provider of consumer and marketplace information. Nearly one-quarter (22%) of U.S. respondents said that once they have covered their essential living expenses, they have no money left over.

   
Markets with Highest Percentage of Consumers Who Have No Spare Cash

Ten Highest
Market
% with "No Spare Cash"
1
 United States
22%
1
 Portugal
22%
3
 Canada
19%
4
 United Kingdom
17%
5
 France
16%
6
 Netherlands
15%
7
 Turkey
14%
8
 Germany
13%
9
 Chile
12%
10
 South Korea
12%

Source: ACNielsen Online Consumer Confidence Study
  
The findings are from ACNielsen’s Online Consumer Confidence Study, a twice-yearly global survey that gauges consumers’ current confidence levels, spending habits/intentions and major concerns. This survey marks the third in the series, the first of which began in October 2004.

   

While the U.S. may have the highest percentage of consumers with no spare cash, this number has dropped 6 percentage points since the last ACNielsen survey in May 2005.
The improvement dovetails with other signs that U.S. consumers are trying to improve their financial situation. For example, of U.S. consumers who do have spare cash, their first priority for that money is debt repayment (42%). This number has increased nine percentage points since October 2004. Additionally, more than one-third (35%) of U.S. consumers report putting spare cash into savings – up 12 percentage points since October 2004.

  

Other priorities for spare money include out of home entertainment (28%), new clothes (25%), home improvements and decorating (24%), and holidays and vacations (24%).
  

How U.S. Respondents Utilize Spare Cash

Once you have covered your essential living expenses, which of the following statements best describes how you normally spend your spare cash?
November 2005
May 2005
October 2004
Paying off debts/credit cards/loans
42%
37%
33%
Putting into savings
35%
23%
23%
Out of Home Entertainment
28%
21%
29%
New Clothes
25%
15%
21%
Holidays/Vacations
24%
14%
N/A
Home Improvements/Decorating
24%
21%
20%
New Technology
17%
9%
10%
Investing in shares of stocks/mutual funds
12%
7%
5%
Retirement fund
11%
7%
N/A
Don't know/Undecided
2%
N/A
N/A

Source: ACNielsen Online Consumer Confidence Study

  

“One factor for the increased emphasis consumers are placing on paying off debts and building savings may be the new bankruptcy law that went into effect in October 2005, making it more difficult for people to simply walk away from their debts,” said Tom Markert, ACNielsen’s chief marketing and client service officer. “Time will tell whether what consumers say they are doing in terms of saving more and paying down debt will translate into actual improvements in these areas. But consumers are at least indicating a desire to shore up the foundations of their financial houses.”

  

For the first time, the survey asked respondents how they keep their budgets balanced. The most popular strategy was cutting back on restaurant-bought meals. In addition, more than half of consumers try to save on gas and electricity, spend less on out of home entertainment, and reduce spending on new clothes.
  
How U.S. Respondents Balance Their Budget

At times when the cost of living is rapidly rising, which of the following actions do you take in order to stay within your budget?
Cut Down on Take-Away Meals
66%
Try To Save on Gas and Electricity
61%
Cut Down on Out of Home Entertainment
60%
Spend Less on New Clothes
54%
Use Vehicles Less Often
47%
Switch to Cheaper Grocery Store Brands
42%
Delay Upgrading Technology
41%
Cut out Annual Vacations
38%
Delay the Replacement of Major Household Items
37%
Cut Down on Telephone Expenses
24%
Use Coupons More Often
19%
Look for Better Deals on Home Loans, Insurance, Credit Cards
16%
Buy Cheaper Brands of Alcohol
8%
Cut Down on Smoking
8%
Something else
7%
No Action
4%

Source: ACNielsen Online Consumer Confidence Study
  

The ACNielsen Online Consumer Confidence Survey is the largest global survey of its kind, which gauges consumers’ confidence levels, spending habits/intentions and current major concerns. The survey, which took place in November 2005 over the Internet, polled 23,500 respondents in 42 markets: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, South Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, UAE, United Kingdom, and the United States. The sample size in most markets was approximately 500, although 1,000 consumers were surveyed in each of the following markets: China, France, Germany, the United Kingdom, and the United States. The survey has a margin of error of plus or minus 4.4% in markets with a sample size of 500, and plus or minus 3.1% where there was a sample size of 1,000.
 
About ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing information provider. Offering services in more than 100 countries, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen’s market research, proprietary products, analytical tools, and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

Contact:  Ken Li, Dome HK, 1 312 836 2912, KennethL@Domehk.com.