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ORLANDO, Fla. -- "While fear is still weighing heavily on consumers’ mind, we are beginning to see evidence of a number of positive economic points lining up," said James Russo, vice president, marketing for The Nielsen Co., during yesterday morning’s economic forecast presentation at Nielsen’s Consumer 360 Conference here.
Although he pointed out that more difficult economic times may lie ahead (the national unemployment rate is expected to climb from the current 8.9 percent to 10 percent), Russo told the audience of retailers and consumer product goods manufacturers that the worst of the recession might be over. Consumers’ fears over losing their retirement savings, their jobs and their homes still exists, but is less than it was just a couple of months ago, he noted.
Russo also reminded the audience that difficult times are often times when innovation and investment are most crucial. "What do GE, Disney, Microsoft and HP all have in common?" he asked. "They all started during periods of economic uncertainty."
Drawing on research from across the gamut of Nielsen Company assets, Russo noted the following key points:
-- Value retail channels are driving shopping trips.
-- Consumers globally are cutting down on out-of-home entertainment, discretionary purchases and are buying more store brands.
-- Health and wellness is still important to consumers, but the growth of higher-priced organic products is slowing down.
-- Consumables are driving sales. "If you can’t eat it, you can’t sell it," Russo said quoting one retailer.
-- Internet traffic on food Web sites is growing at a faster pace than other types of sites.
-- People are spending more time on the Internet.
-- Despite the recession and high-price tag, the household penetration of high-definition TV is climbing.
-- Box office sales at movie theaters are up, but slowing.
-- The overall buy rate for video games is climbing (up 19 percent in 2008).
The resident Nielsen economic expert predicted "tough but moderating" economic conditions ahead. "There’s been a fundamental shift in consumer spending as "restraint" is the new mantra of consumers," said Russo, who added that a recent Nielsen survey found that 50 percent of consumers said their personal financial condition was the same or better now than last year at this time.
In an entertaining part of his presentation, Russo also rattled off new politically correct terms now in vogue—or as he termed it, "the rebranding of the meltdown."
Terms used in September 2008:
International financial regulator
Terms used in May 2009:
Advisors to Free Flow Capital
Synergy-related head count adjustments
Slow Turnaround in Economy Not Changing Consumer Shopping Habits