While most Canadians say they are financially better off than they were prior to the recession, there are still underlying concerns about the rising prices of household necessities such as gasoline, food and electricity.
Those are among the findings of the latest edition of Bensimon Byrne’s ongoing Consumerology series of reports. The findings are based on a survey of 1,500 Canadians conducted by the Gandalf Group between March 24 and 29.
More than 58% of the people surveyed said that their financial situation is better now than it was before the recession, with 81% predicting that they will be doing even better a year from now.
A big reason for the increased confidence stems from rising home values, with 58% of respondents stating that their house or condo is worth more than it was prior to the recession.
According to the latest figures from the Canadian Real Estate Association, the average value of a Canadian house in March was $371,286, compared with $341,081 a year ago.
However, the survey also reveals a disconnect between consumers’ outlook and their personal spending. The study found that in the next year, Canadians plan to spend more in only three areas: savings/debt reduction, groceries and gasoline. Categories where respondents indicated that they will spend less in the next year included live sports events, bars/clubs/live music, alcohol, fitness and vacations/travel.
The data suggests a continued need for marketing built around intriguing value propositions, said Bensimon Byrne president Jack Bensimon.
“The idea that discretionary spending is going to surge ahead and create a powerful bullish recovery driven by consumer spending – which drives 70% of the economy – is probably overly optimistic,” said Bensimon. “Those pressures are flashing a red signal to marketers that it’s not time to take focus away from the value propositions they’ve recalibrated for the era of thrift and frugality.
“We’ve got a real cautionary environment from a consumer spending standpoint looking ahead, and I think marketers need to be wary of that.”
One of the ways consumer frugality is manifesting itself, Bensimon said, is the rapid rise of group buying services such as Groupon or TeamBuy. The study found that more than a quarter (27%) of Canadians currently use a discount/deal-of-the-day site, with another 39% indicating they were either somewhat likely (32%) or very likely (7%) to join such a service in the future.
“That’s a manifestation of the dynamic we’ve been talking about in our study,” said Bensimon. “Canadians are so pressed to stretch their household budget, at all income levels, they’re participating in completely novel cost-efficiency exercises like online couponing.”
The study found that one-third of group discount users check online for discounts at least once a day, while only 20% indicated that they would use such services less if their household income were to increase.
