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Brazil's economic crisis bites consumer confidence

08 Mar '16
5 min read


The research found that financial anxieties are significantly altering consumption patterns in Brazil. Ninety-five percent of consumers said they have changed their shopping and saving behavior in some way. Sixty-three percent said they are eating at home more often, 60 per cent said they are “buying fewer things overall,” and 58 per cent are saving more. All are significant increases from 2014. A greater percentage also said they are hunting for better prices.

Although Brazilians plan to spend less on all kinds of foods and beverages, many respondents indicated that health and quality remain high priorities - in keeping with findings in previous BCG surveys. Sixty-four per cent of respondents cited “healthier or better for you” as a reason for trading up to higher-value products. For the fifth year in a row, “fresh food” was cited as the top food category for trading up in 2015. Fresh fruits and vegetables, locally grown food, natural products, “super foods,” and organic milk were also high trading-up priorities. In addition to fast-service restaurants and sit-down restaurants, the leading categories cited for trading down were snack foods, energy drinks, and sugar confectionaries.

Sixty-seven percent of respondents said they plan to “trade down” to lower-value non-food items, compared with only 33 per cent who gave that response in 2011. Magazines, luxury brands, fashion jewelry, and travel purchases were the top trading-down priorities.

For consumers who intend to trade up, the categories cited most often were beauty and personal care products. But even these consumers want value for money. The highest priorities cited by respondents are products that “give better results” and offer “meaningful technical differences” relative to competing products. By contrast, only 48 per cent said they intend to trade up because they “deserve it,” compared with 81 per cent who cited that reason in 2011.

Many companies will need to overhaul their approach to Brazil in order to succeed in the challenging years ahead, according to the authors. They will need to take a fresh look at their product portfolios, brand positioning, pricing strategies, and marketing messages to make sure they are in line with the priorities of key consumer segments and Brazil's new economic context. And rather than trying to achieve growth through higher sales volume, many companies should seek to boost profitability by improving the efficiency of their operations, the report said. (SH)

Fibre2Fashion News Desk – India

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