Consumer confidence in Australia is fuelling the rise of ‘savvy shopping’, according to findings from market research organisation Nielsen.

Nielsen said Australian consumers were optimistic about their buying habits over the next 12 months, and were well ahead of the global average, despite a continued slump in global consumer sentiment. Nielsen’s latest global Consumer Confidence Index report showed a two point decline in global consumer confidence to 96, as every region regressed slightly in the fourth quarter of 2014.

Almost half Australian consumers confident about spending in next 12 months

Despite overall Australian consumer confidence falling five points to 93 in the end of 2014, almost half (45 per cent) of Australians say the next 12 months is a good time to buy the things they want and need. This number is up from 40 per cent in the period in 2013 and notably higher than the global average of 39 per cent.

“In Australia, the challenging consumer confidence outlook is fuelling the rise of ‘savvy shopping’,” said Johnny Gorman, Head of Nielsen’s Shopper Group. “We are seeing shoppers prepared to shop around at different stores to find the best price – driving an increase in frequency of purchase, but also a knock on effect of declining shopper loyalty. It almost perpetuates a vicious circle as supermarkets compete on price to try and retain shopper spending in their stores,” he said.

Basket size and trip frequency increasing

Nielsen’s HomeScan Consumer Panel data reflects this trend, with both basket size and trip frequency increasing. In 2014, average trips to the supermarket over a 12 week period increased from 27.5 to 28.3 peaking at 28.7 in September 2014, the highest it has been in at least 2 years.

“We referred to 2014 as the year of shopping around, and we expect this to continue in 2015. Australians are shopping at more stores to seek out their favourite products,” Mr Gorman said. “We are moving into an age when you don’t have to buy everything you need in one big shop; our savvy shopping means that we’re popping down to the shop more frequently than ever before,” he said.

Dollars spent increasing

Likewise, basket size also grew across all major grocery departments in 2014 with Australian consumers steadily spending an increasing amount of dollars per trip, according to Nielsen. In the second half of 2014, average dollars spent per trip increased by 5 per cent from $44.10 to $46.40.

“The Christmas rush saw a small decrease in basket size compared with 2013,” Mr Gorman said. “However, the amount of trips we’re taking to the supermarket has increased; more than making up for this drop. Consumer confidence overall might be down, but our propensity to purchase isn’t,” he said.

Mr Gorman  said the steady increase of average spend per trip since 2012 was “a reflection of market forces including inflation, as well as retail influences such as an increase in  promotional frequency and innovation in private label”.

“We have more choices and lower prices across more categories,” Mr Gorman said. “The result is that we may end up buying more items each trip. Our optimism for our ‘buying future’ is a result of a strong retail push for quality, innovation and value,” he said.

Optimism about personal finances down

Despite this optimism, Nielsen said perception of positive local job prospects in the next 12 months continued to decrease and was now at 40 per cent, down from 42 per cent in the prior quarter and 45 per cent in Q4, 2013.

Also contrary to shopping optimism was a decrease in optimism about personal finances. Perception of positive personal finances in the next 12 months was at 53 per cent – down from 57 per cent in the prior quarter and 54 per cent in Q4, 2013.

“These competing trends mean the industry will continue to be challenged into 2015,” Mr Gorman said. “Our work with retailers and manufacturers involves interpreting the sentiments of their consumers and applying the right strategies in order to manage their shoppers’ particular needs and wants. Australians are still carefully considering their future and the industry must do the same,” he said.

Globally, consumer confidence ended 2014 with an index score of 96; a decline of two index points from the previous quarter, which comes after several quarters of positive momentum. While confidence fell slightly in every region in the fourth quarter, the global index closed the year up two points from last year (94 in Q4 2013), and up from pre-recession level of 94 from Q3 2007.

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