Consumer saving strategies

Management consultants McKinsey are warning that private consumption in Europe could see a long-term decline. A survey reveals that there are five factors determining consumers’ propensity to spend: consumer confidence, income, assets, credit availability and the cost of living. Four of these factors are currently experiencing negative development, with a slightly positive trend perceptible only in the cost of living. Consumers are reacting to the situation with five different saving tactics. Three of these are related to volume: control of one’s budget (eg, no more visits to the cinema), replacement of goods only when actually needed, and do-it-yourself (cooking at home instead of going out for a meal). Two other saving tactics are related to price: thinking more critically about the actual value of products (eg, no-frills or own-label models) and shopping around for bargains.