The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In Russia

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The Global Economic Crisis: The Impact On Consumer Attitudes &
Behaviors In Russia
Published on October 2009

Report Summary

Introduction

Datamonitor's survey of Russian respondents established that 76% either 'strongly' or 'tended' to agree with the statement "I believe
my country of residence is in a recession". A 'recessionary mindset' has driven Russian consumers to adopt a largely pessimistic
attitude to the wider economic situation and its impact on their lifestyles in 2009

Scope

*Detailed analysis documenting Russian consumers' 'recessionary mindset' and how this influences perceptions about current and
future prospects

*Insights highlighting how the economic downturn has affected perceived quality of life, emotional wellbeing and financial security in
Russia

*In-depth analysis of Russian shoppers' changing price sensitivity, value consciousness and attitudes towards private label across 4
major FMCG sectors

*Countries and categories covered: Russia; food and non-alcoholic beverages, alcoholic beverages, personal care and household
care

Highlights

Overall quality is the leading factor influencing where Russians do their shopping, with 82% stating this was of a 'high' or 'very high'
amount of influence to them. Clearly Russian shoppers are reluctant to sacrifice on quality, perhaps in an attempt to reduce risk

When surveyed by Datamonitor in April 2009, nearly half (46%) of Russian respondents agreed that they were giving up some of their
favorite brands in light of the economic downturn. This was marginally higher than the overall perception among the entire
respondents across the 17 countries

Russian consumers are becoming more value conscious and therefore looking to save money when buying groceries, though not
necessarily through price promotions

Reasons to Purchase

*Gain a detailed understanding of changing consumer attitudes and behaviors amid the downturn in order to determine appropriate
recessionary strategies

*Obtain country and sector specific insight about pertinent recessionary themes such as brand loyalty and consumers' value
consciousness

The Global Economic Crisis: The Impact On Consumer Attitudes & Behaviors In Russia Page 1/8


*Assist consumer segmentation and targeting efforts by accessing data from two waves of primary research conducted in August
2008 and April 2009

Table of Content

Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 3
Table of tables 4
THE FUTURE DECODED 5
INTRODUCTION: Understanding how 'recessionary mindsets' influence Russian consumers' attitudes towards and actual
consumption is vital 5
The 'recessionary mindset' of Russian consumers is reflected by the widespread belief that they're in a recession 5
The economic downturn has had an impact on the lifestyles of more than half of Russian consumers 6
Key takeouts and implications: a 'recessionary mindset' has driven Russian consumers to adopt a pessimistic attitude to the wider
economic situation and its impact on their lifestyles in 2009 8
TREND: The downturn is making many Russians more pessimistic in the face of falling prosperity 8
Russians are generally more discontent with their lives than consumers in other countries 8
Key takeouts and implications: the mood towards the direction of Russian society has dampened in 2008-09, with less than a quarter
expressing explicit satisfaction with their quality of life 10
TREND: Russian consumers are pessimistic about their financial security and future economic prospects 10
Satisfaction with one's financial situation is low among Russian consumers and has worsened in 2009 11
Perceptions about the economy, job security, financial status and the housing market in Russia are all pessimistic to varying degrees,
with little optimism for the six months ahead 13
Russians are managing their finances more closely but adopt a less cautious approach to spending than other nations 18
Russians are making greater efforts to save and still aspire to be less reluctant on credit 19
Key takeouts and implications: Russians have lost satisfaction with their financial situation and there is only mild optimism of any
improvement coming towards the end of 2009 20
INSIGHT: The global economic crisis has had a negative impact on the emotional wellbeing of Russians with levels of stress up and
personal happiness down 21
Self-reported stress levels among Russians have been negatively impacted during the financial downturn 21
Work-life balance has also worsened in combination with the deepening downturn 23
The happiness levels of Russian citizens have declined in line with the global economic crisis 25
Key takeouts and implications: recessionary consumers in Russia are in greater need of emotional and physical 'pick-me-ups' 27
INSIGHT: Russian consumers have become increasingly price and value conscious following the global economic downturn 28
Russian consumers are becoming more value conscious and are therefore looking to save money when buying groceries, though not
necessarily through price promotions 28
Price and value consciousness heavily influences where Russian consumers do their grocery shopping and how they shop, but
quality still matters too 31
Key takeouts and implications: the value consciousness of Russians has intensified and is reflected by how they determine where to
shop 34
INSIGHT: Brand loyalties are under increasing threat as Russian shoppers give up brands and increasingly embrace private label 34
Russian consumers are beginning to give up some of their favorite brands, as they make more 'considered' choices 35
Private labels are becoming more attractive to Russian shoppers, especially in the downturn 37
Key takeouts and implications: the general value consciousness of Russians, combined with their current reflective consumption



patterns, has the potential to create an optimal platform for private label growth 41
INSIGHT: Russian consumers are embracing money saving tactics when it comes to food and non-alcoholic beverage purchases and
preparation 42
Russian consumers are adopting various responses to cut back on food and beverage expenditures, particularly preparing more
meals at home 42
Many Russian shoppers consider private label food and non-alcoholic beverages to be identical to famous branded equivalents 48
Key takeouts and implications: a resurging desire to cook more often at home has occurred, but increased competition in food and
non-alcoholic beverages between private label and market leading brands has yet to fully materialize 49
INSIGHT: The significant majority of Russian consumers' personal care regimes and related product choices have been 'recession
resistant' 50
Nearly three quarters of Russian consumers are committed to looking their best in day-to-day life 50
Price and value-conscious personal care/beauty shoppers in Russia have not made notable changes to their personal care shopping
and usage in order to save money 52
Russians have a polarized attitude towards private label personal care products 55
Key takeouts and implications: Russian consumers' health and beauty regimes are influenced by a strong desire to look one's best 57
INSIGHT: Russian consumers' alcohol consumption patterns and preferences have not changed significantly during the downturn 57
Russian drinkers have not been making significant cut backs in the amount of alcohol they consume 58
Russian drinkers have not become significantly more value conscious in both their at-home and out-of-home alcoholic beverage
choices in 2008-09 59
Private label alcohol is not as prevalent in Russia as in other countries, which results in uncertainty about comparative quality against
branded equivalents 62
Russian drinkers are more concerned about the quality credentials of alcoholic beverage brands and are less concerned about brand
image 63
Key takeouts and implications: there has been little to no change in the alcohol consumption patterns for many Russian drinkers
suggesting that alcohol is largely 'recession resistant' 64
INSIGHT: Russians' household care buying preferences are heavily shaped by price consciousness irrespective of an economic
downturn 65
Price-led value is still the most influential factor for Russians' household and laundry care purchases but preferences do reflect other
important influences 65
The private label household care market in Russia is small but potentially lucrative given shoppers' desire for value 68
Key takeouts and implications: Russian consumers associate hygiene and cleanliness with wellbeing and this makes them somewhat
quality conscious 71
ACTION POINTS 72
ACTION: Adopt a relentless approach to delivering and communicating better value-for-money than the competition without just
focusing on lower prices 72
Actively demonstrate value-for-money by re-appraising marketing initiatives, including slogans 72
Ensure that the value gains are instantaneous 73
Evaluate and adapt cost structures so that it is feasible to offer value-for-money solutions 74
Focus on quality to maintain differentiation and prove to consumers that quality really matters 75
Start planning for the longer-term by continually tracking Russian consumers as an economic recovery begins to become a reality 76
APPENDIX 77
Methodology 77
Further reading and references 78
Ask the analyst 79
Datamonitor consulting 79
Disclaimer 79
List of Tables
Table 1: Consumer survey: level of satisfaction with "the general direction of how things are going" and "quality of life", in Russia
(compared with the global average), 2009 9
Table 2: Consumer survey: satisfaction with current financial situation and importance attached to wealth/ income and having finances



in good order, in Russia (compared with the global average), 2009 13
Table 3: Consumer survey: perceptions of whether broader economic and personal conditions had improved or worsened in the six
months previous, and how each might change in the proceeding six months, in Russia, 2009 17
Table 4: Consumer survey: propensity to feel tense and the extent to which perceived levels of stress have changed in the last six
months and are expected to change in the next six months, in Russia, 2008-09 23
Table 5: Consumer survey: propensity to feel very tired and the extent to which perceived work-life balance has changed in the last
six months and is expected to change in the next six months, in Russia, 2008-09 25
Table 6: Consumer survey: happiness levels and the extent to which perceived happiness has changed in the last six months and are
expected to change in the next six months, in Russia, 2008-09 26
Table 7: Consumer survey: changing value-consciousness and desire to save money when buying groceries among Russian
shoppers, 2009 31
Table 8: Consumer survey: changing efforts are being made to use coupons, change grocery store choice to save money, embrace
more disciplined shopping and gather and utilize store price information among Russian shoppers, April 2008-April 2009 33
Table 9: Consumer survey: the relative cost/value and quality consciousness of Russian and global consumers overall when
purchasing food and beverage products in 2008 44
Table 10: Consumer survey: the extent to which Russian consumers made an effort to save money by adopting various food and
drinks consumption and preparation approaches, 2008-09 46
Table 11: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or market
leading famous brands in food, soft drinks and hot drinks, in Russia, 2009 49
Table 12: Consumer survey: the importance attached to looking one's best in day-to-day life, the pressure to look good, and
satisfaction with physical attractiveness/appearance, among Russian consumers, 2008 and 2009 51
Table 13: Consumer survey: the extent to which consumers are making an effort to save money by using spas or salons less often, in
Russia, 2008-09 54
Table 14: Consumer survey: attempts made by Russians to change their personal care/beauty habits in order to save money, by
product category, 2008-09 55
Table 15: Consumer survey: perception of private labels versus well known or market leading famous brands for grooming/ beauty
products, and agreement that such products are good alternatives to well known or market leading famous brands, in Russia, 2009 56
Table 16: Consumer survey: attentiveness towards the amount of money spent on alcohol and the degree to which alcoholic
beverage consumers in Russia have cut down on the overall amount of alcohol bought/consumed in 2008-09 59
Table 17: Consumer survey: the changing degree to which household and laundry care consumers in Russia made product choices
with value or cost in mind, 2008 66
Table 18: Consumer survey: attitudes towards doing housework in Russia and globally, 2008 67
Table 19: Consumer survey: perception about the relative superiority or inferiority of private labels versus well known or
market-leading famous brands for household cleaning/laundry products, and how often such products are purchased to save money,
in Russia, 2009 70
List of Figures
Figure 1: Datamonitor's Recession and Recovery portal will allow industry players to continually identify emerging opportunities and
track what is happening in the Russian economy as it develops 5
Figure 2: In April 2009, over three quarters of Russian consumers believed that their country was in recession 6
Figure 3: More Russians believe that the recession has changed their lifestyles in 2009 than in 2008 7
Figure 4: Generally Russian consumers are less satisfied with their lives than the global average 9
Figure 5: The significant gains in positive Russian consumer sentiment towards the country's economic situation plummeted in 2009
11
Figure 6: More than half of Russian consumers are currently dissatisfied with their financial situation 12
Figure 7: In 2009, Russians have adopted a more negative viewpoint about the economy than their own personal situation 14
Figure 8: Russians are more pessimistic about the economic conditions of their country going forward than their personal finances 16
Figure 9: The future-focused economic confidence of Russians is more positive than negative, but has nonetheless declined in 2009
18
Figure 10: Russians are managing their finances more closely in light of the downturn, while more than a quarter of individuals report
difficulties in paying all the bills 19



Figure 11: Russian consumers are generally reluctant to sustain their reliance on credit and demonstrate a growing need to save
money 20
Figure 12: The economic downturn has also been accompanied by additional stress levels among Russians 22
Figure 13: Russians are less prone to tiredness than global consumers but a similar proportion are of the impression that their
work-life balance has worsened 24
Figure 14: Two thirds of Russians said they felt happy only occasionally in the past month 27
Figure 15: Many Russians are more value-conscious following the downturn, more so than their global counterparts 30
Figure 16: Russian consumers attach considerable importance to quality in deciding where they do most of their shopping 32
Figure 17: Russian grocery consumers have been making more effort to change where they shop and using a pre-determined
shopping list in 2009 33
Figure 18: As the global economic downturn has intensified, so too has the extent to which Russian consumers have been forced to
sacrifice some of their favorite brands 36
Figure 19: Being seen with the 'right brand' is of similar importance to both Russian and US consumers 37
Figure 20: More than a third of Russian consumers look to private label brands as a key reason to shop in a particular store 39
Figure 21: Less than a quarter of Russian shoppers are routinely buying private label/store branded products in an effort to save
money 40
Figure 22: The private label market is impacted by a broad range of drivers and inhibitors 41
Figure 23: Russians became increasingly value conscious in their food and beverage choices in 2008, but that was not reflected by a
substantial quality compromise 43
Figure 24: The attributes deemed most influential in what food and beverages Russians buy highlight the importance of living well for
less money 44
Figure 25: Russian retail expenditure on food has grown significantly in the last decade 45
Figure 26: Russians are adopting various responses to cut back on food and beverage expenditures, with the most significant
emphasis being on cooking more from home 46
Figure 27: Majorities of Russians cook an evening meal at home from scratch five times or more a week 47
Figure 28: There has been a slight increase in the self-reported propensity for Russians to have a occasional takeaway meals at
home 47
Figure 29: Russians are less certain of the differences between private label and branded hot drinks than of other categories 48
Figure 30: Russian consumers are highly appearance conscious and this makes them less willing to trade-down when making
personal care choices 51
Figure 31: Russian personal care/beauty shoppers became more price and value conscious in 2008 but showed little desire to
sacrifice on quality 53
Figure 32: Personal care/beauty shoppers in Russia and elsewhere are highly price conscious, although brand image is of
considerable importance to Russians 54
Figure 33: Only 22% of Russian consumers consider private label beauty products to be good alternatives to well known or
market-leading brands 56
Figure 34: Russian drinkers are careful about how much they spend on alcohol, but do not perceive that they have been making
significant cut backs in the amount they consume in 2008-09 59
Figure 35: Value consciousness among Russian drinkers has had more impact on at-home alcoholic drinks' consumption in 2008-09
60
Figure 36: Russian drinkers, perhaps influenced by a sense of entitlement, are reluctant to opt for cheaper brands and formats of
alcoholic beverages 61
Figure 37: Nearly a third of Russian drinkers are highly influenced by alcohol beverage promotional offers 61
Figure 38: Only a small proportion of Russian drinkers believe that private label alcoholic drinks are good alternatives to
market-leading or famous brands 62
Figure 39: Russian drinkers are less likely to be skeptical of private label beer compared to wine or spirits 63
Figure 40: Russians are becoming more attached to their favorite alcoholic beverage brands as the global economic downturn
intensifies 64
Figure 41: Russians have a growing price consciousness that influences their household purchases 65
Figure 42: In 2008, Russian household and laundry care choices were made with greater consideration for cost/value but consumers



showed an ongoing desire for efficacy-led quality 66
Figure 43: Russian consumers value cleanliness, somewhat dislike household tasks and seek to minimize the amount of time they
spend on such tasks 67
Figure 44: Nearly three quarters of Russian consumers are 'frequent' purchasers of household care products on the basis of
value-for-money 68
Figure 45: Less than a quarter of Russian consumers regularly purchase private label household care products to save money 69
Figure 46: A small proportion of Russian consumers consider private label household and laundry products to be superior to branded
equivalents 70
Figure 47: Coles' 'Feed Your Family for Under $10' campaign is similar to an approach adopted by Sainsbury's in the UK 73
Figure 48: Manufacturers and retailers looking to deliver value-for-money must in the provision of factors associated with the PPI, but
while also offering consumers lower than expected prices 75
Figure 49: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start
planning for the longer-term 76



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