CONSUMER CONFIDENCE

1CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013 Copyright © 2013 The Nielsen Company

C O N S U M E R C O N F I D E N C EA CANADIAN PERSPECTIVE Q1 2013

2 CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013

OVERALL CONFIDENCE UP IN CANADA AND GLOBALLYIn Canada and most of the world, consumer confidence was on the

upswing in the early months of 2013.

The Nielsen Global Consumer Confidence Index measures views

about job prospects, personal finances and the ability and willingness

to spend. These economic indicators are captured in a consumer

confidence level.

Canada’s confidence level now stands at 102. That’s 11th among the 58

countries Nielsen surveyed.

Levels above and below 100 – a score that’s considered neutral – show

degrees of optimism and pessimism. In the previous survey, for the

fourth quarter of 2012, the consumer confidence level in Canada did

reach 100, and that was the highest level in 18 months. Over the last

year of Nielsen consumer surveys, the Canadian confidence levels have

improved every quarter.

Globally, the consumer confidence level rose from 91 to 93. More

important, 55% of the countries posted improved confidence levels,

compared to just 33% in Q4.

“With recent spending in consumer packaged goods relatively flat, the

greater optimism is welcome news,” says Carman Allison, director of

consumer insights, Nielsen Canada. However, the question remains

whether the positive momentum in many key measures will continue

deeper into 2013, and translate into increased buying.

NIELSEN CONSUMER CONFIDENCE INDEX CANADA GLOBAL

Q1 2012 93 94

Q2 2012 94 91

Q3 2012 99 92

Q4 2012 100 91

Q1 2013 102 93


MORE READINESS TO SPEND Canadians are feeling noticeably better about of the state of their

personal finances. Two-thirds of Canadians consider their finances be

good (60%) or excellent (6%). That’s up five percentage points from the

Q4 Nielsen survey.

The upbeat attitude is also reflected in readiness to spend. At the start

of 2013, 45% of Canadians felt positive about spending, considering

current costs and their personal finances. That compares to 41% in the

previous Nielsen survey, continuing a consistent rise – an increase of 14

percentage points from the same point last year.

With the strong Canadian response, and 41% of U.S. respondents also

signaling their readiness to buy, North America leads the global regions

for spending intentions over the next 12 months.

IS THIS A

GOOD OR BAD

TIME TO BUY?

CANADA

Q1 2012

CANADA

Q2 2012

CANADA

Q3 2012

CANADA

Q4 2012

CANADA

Q1 2013

Excellent 4% 2% 5% 4% 4%

Good 27% 32% 35% 37% 41%

Not good 52% 47% 45% 43% 42%

Bad 16% 17% 12% 14% 11%

3Copyright © 2013 The Nielsen Company

AT THE START OF 2013, 45% OF CANADIANS FELT POSITIVE ABOUT SPENDING, CONSIDERING CURRENT COSTS AND THEIR PERSONAL FINANCES.


ENTERTAINMENT AND CLOTHES LEAD UPTICK IN DISCRETIONARY PURCHASESIs the apparent readiness to spend translating into actual loosening

of the purse strings? “We’re gleaning what I would call a cautious

eagerness to spend,” says Allison.

Nielsen asked Canadians how they use their spare cash after covering

essential living expenses. Compared to Q4, discretionary spending is

up for out-of-home entertainment (+4%), new clothes (+4%), home

improvements/decorating (+3%),new technology products(+1%) and

holidays/vacations (+1%).

While one-fifth of Canadians continue to say they have no spare cash

– a number that has remained consistent for the last four years – more

Canadians are putting money towards savings (+6%) and retirement

funds(+5%). However, timing is an influencer as Canadians typically

shift spare cash into investments before the tax deadline.



OUT-OF-HOME ENTERTAINMENT

15%19%

18%22%

14%15%

17%20%

25%26%

18%20%

NEW CLOTHES

NEW TECHNOLOGY PRODUCTS

HOME IMPROVEMENTS/DECORATING

HOLIDAYS/VACATIONS

I HAVE NO SPARE CASH

PAYING OFF DEBTS/CREDIT CARDS/LOANS

PUTTING INTO SAVINGS

INVESTING IN SHARES OFSTOCK/MUTUAL FUNDS

RETIREMENT FUND

Q4 2012 Q1 2013

44%42%

35%

13%14%

13%

18%

41%

CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013

WHAT DO YOU DO WITH YOUR SPARE CASH?

SPENDINGSTRATEGIES

SAVINGSTRATEGIES


STILL NOT SOLD ON REBOUND FOR JOBS AND ECONOMY“While Canadians seem to be more positive about spending, those signs

are tempered somewhat by a lukewarm view of the economy as a whole,”

says Allison.

Half of Canadians rate job prospects as good or excellent, down from

54% in the last Nielsen survey, and up just two percentage points from

this time last year.

Nielsen conducted the survey over the last 10 days of February and the

first week of March. The employment figures from both months show

that job gains and losses can still be somewhat volatile.

According to Statistics Canada, the Canadian economy created 51,000

jobs in February 2013, following a slight decline the previous month.

However, Canada lost 54,500 jobs in March, causing the biggest dent to

the country’s employment numbers in four years, as the unemployment

rate rose to 7.2%. Still, since the worst of the global recession in

July 2009, employment in Canada has increased by nearly 900,000.

Compared to the pre-recession peak, Canada has added more than

465,000 jobs.

The number of Canadians who feel that the country is still in a recession

has also barely moved – 50% now, up slightly compared to 48% in the

last Nielsen survey, and down two percentage points from 52% in the

first quarter of 2012.

HOW DO YOU RATE JOB

PROSPECTS?CANADA Q4

2012CANADA Q1

2013

Excellent 7% 4%

Good 47% 46%

Not good 37% 38%

Bad 6% 5%

(% ANSWERING YES)


Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

CANADA

50%48%49%50%52%

In April, the Bank of Canada reported that growth is expected to pick up

to about 2.5% in the second half of 2013. Despite this, weak growth in

the second half of 2012 means that annual average growth could be just

1.5% in 2013. The central bank now forecasts that the Canadian economy

will reach full capacity in mid-2015 (later than anticipated in January

2013). The Bank of Canada also expects the household debt-to-income

ratio to stabilize near current levels, and consumer spending to grow at

a moderate pace.

DO YOU THINK YOUR COUNTRY IS IN AN ECONOMIC RECESSION AT THE MOMENT?

(% ANSWERING YES)


FRUGAL HABITS CONTINUELingering concerns about the economy have reinforced some new

spending habits. 62% of Canadians in the Q1 survey say they’ve

changed their spending to save on household expenses. That’s virtually

unchanged from the first quarter of 2012.

How are Canadians looking to save? Compared to the previous

Nielsen survey, more people are looking to cut down on out-of-home

entertainment and on take-away meals. At the same time, Canadians

aren’t as likely as they were before to switch to cheaper grocery brands,

drive less often, and delay technology upgrades. “Specific saving

strategies are evolving, but we’re still seeing a recessionary mindset,”

says Allison.

Here are 15 ways that Canadians are saving, with the percentage change

from the Q4 2012 Nielsen survey in parentheses.

Cut down on out-of-home entertainment: 61% (+5)

Spend less on new clothes: 58% (-2)

Cut down on take-away meals: 57% (+2)

Try to save on gas and electricity: 56% (-1)

Switch to cheaper grocery brands: 44% (-7)

Cut down on telephone expenses: 32% (+1)

Use my car less often: 31% (-8)

Cut down on holidays/short breaks: 31% (-5)

Delay upgrading technology (PC, mobile, etc.): 26% (-10)

Delay replacing major household items: 26% (-4)

Look for better deals on home loans, insurance, 23% (-6)credit cards, etc.: Cut down on at-home entertainment: 23% (no change)

Cut out annual vacation: 23% (-4)

Cut down on or buy cheaper brands of alcohol: 19% (-3)

Cut down on smoking: 13% (no change)



DEBT AND ECONOMY REMAIN TOP CONCERNSDebt and the economy are again the biggest worries for Canadians. Yet

those concerns are falling a bit, while other financial concerns – bigger

bills (food and utilities) and job security – are on the rise. “We’re well

into an economic recovery, but it doesn’t feel that way to a lot of people

which will continue to fuel value based market drivers,” says Allison.

Here’s what Canadians named as their #1 and #2 concerns over the next

six months, with the percentage change from the last survey noted.

Allison summarizes, “As we head into 2013, we’re seeing a bit of mixed

results – consumers are feeling more optimistic but are still cautious

about spending. Only time will tell if consumers will open their wallets

wider and break some frugal habits.”

WHAT IS YOUR BIGGEST

CONCERN OVER THE NEXT

SIX MONTHS?

#1 CONCERN

#2 CONCERN

TOTAL

Debt 16% 11% 26% (-2)

The economy 14% 11% 25% (-3)

Job security 13% 8% 21% (+2)

Increasing food prices 8% 13% 21% (+4)

Health 12% 9% 21% (+3)

Increasing utility bills 7% 10% 17% (+2)

Work-life balance 7% 6% 13% (-2)

CONSUMER CONFIDENCE: A CANADIAN PERSPECTIVE – Q1 2013


ABOUT THE SURVEY The Nielsen Global Online Survey was conducted February 18 to March

8, 2013, and polled more than 29,000 consumers online in 58 countries

throughout Asia Pacific, Europe, Latin America, the Middle East, Africa

and North America. The sample has quotas based on age and sex

for each country based on their Internet users, and is weighted to be

representative of Internet consumers and has a maximum margin of

error of ±0.6%.

This Nielsen survey is based on the behavior of respondents with online

access only. Internet penetration rates vary by country. Nielsen uses a

minimum reporting standard of 60 percent Internet penetration or 10M

online population for survey inclusion. The Nielsen Global Survey, which

includes the Global Consumer Confidence and Spending Intentions

Survey, was established in 2005.

ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and

measurement company with leading market positions in marketing

and consumer information, television and other media measurement,

online intelligence, mobile measurement, trade shows and related

properties. Nielsen has a presence in approximately 100 countries, with

headquarters in New York, USA and Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2013 The Nielsen Company. All rights reserved. Nielsen and

the Nielsen logo are trademarks or registered trademarks of CZT/ACN

Trademarks, L.L.C. Other product and service names are trademarks or

registered trademarks of their respective companies. 13/6462


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