Severe Consumer Anxiety Doubles in Less Than Four Months

May 14, 2008 | 3:32 pm

CHAPEL HILL, N.C., May 14 /PRNewswire/ -- Everyone is talking about the sluggish economy, housing slump, credit crisis, weak labor market and flagging consumer confidence, but new Yankelovich research shows just how quickly consumers' anxieties have intensified -- and which issues are causing them the most concern.

From January to May 2008, the percentage of American consumers who reported feeling "severe anxiety" about economic and other issues doubled -- from 14 percent to 30 percent -- according to Yankelovich, Inc., a leading consumer-trends research company that turned 50 this year and merged with Henley Centre HeadlightVision of London.

The percentage of consumers who reported feeling either high anxiety or severe anxiety rose from 33 percent to 54 percent.

In February, the Yankelovich study Dollars & Consumer Sense revealed that 14 percent of American consumers felt "severe anxiety" about their personal economic and financial situations. Less than four months later, 30 percent of American consumers shared that sentiment -- double the January figure.

Two financial concerns topped the list in that research, with more than seven in 10 consumers mentioning them: the cost of gasoline and the cost of healthcare.

The following chart highlights the significant increase, from January to May, in the economic anxiety felt by consumers. There was a corresponding decrease in the percentage who felt no anxiety.

    When data were collected         Jan. 8-20, 2008   April 23 - May 5, 2008
    Number of consumers surveyed,
     ages 18+                             1,002                 1,512
    Consumer Anxiety Levels:
       No anxiety                            10%                    3%
       Low anxiety                           25                    12
       Moderate anxiety                      32                    31
       High anxiety                          19                    24
       Severe anxiety                        14                    30

The No. 1 concern among consumers is the cost of gasoline, with 83% at least fairly worried about it. However, the worry that showed the biggest increase from January to May is the overall cost of living, with 73% at least fairly worried about it, a jump of 34 percentage points since January.

Five worries showed the greatest increases over the last four months. The percentage of consumers who were "very" or "fairly" worried about these five things increased as follows:

    --  Keeping up with the cost of living (from 39% to 73%, a 34-point
        increase)
    --  Having enough money to put food on the table (from 17% to 42%, a
        25-point increase)
    --  Getting out of debt (from 27% to 48%, a 21-point increase)
    --  Having enough money to retire on (from 43% to 64%, a 21-point
        increase)
    --  The cost of gasoline (from 75% to 83%, an 8-point increase)

"When we released our Dollars & Consumer Sense study in February, we knew that the economic anxiety felt by consumers then was likely to change. But it's gotten a lot worse a lot faster than we anticipated," said Yankelovich president J. Walker Smith, Ph.D. "Knowing that worries were likely to change, though, we developed a Value Planning Model that shows marketers how higher anxiety levels affect shopping behaviors. Consumers are now past the point of just giving up indulgences; people are clamping down on everything. While our model shows growth opportunities even in this period of high anxiety, marketers must be very focused to succeed. The coming tax rebates won't be spent with abandon. People will spend these windfalls deliberately and cautiously."

Smith points to the Yankelovich Value Planning Model (VPM), an integral part of the Dollars & Consumer Sense study, as a beacon that can help marketers find pockets of opportunity in any type of economic climate. VPM is a proprietary tool that helps marketers understand the purchasing trade-offs that consumers will make as their economic anxiety escalates.

"No matter how bad things get, there are certain types of value that consumers won't give up," Smith says. "Our model helps marketers find those opportunities in their own markets, within their specific product categories."

For more information, visit www.yankelovich.com .

About the Studies

The January study was an RDD telephone survey among 1,002 adults ages 18+. The error range at the 95% confidence level is +/- 3.1%. The April/May study was a nationally representative online survey among 1,512 adults ages 18+. The error range at the 95% confidence level is +/- 2.5%.

About Yankelovich

Yankelovich is a leading consumer market research and analytics company that has helped marketers understand consumer values and behavior since 1958. The company has studied consumer attitudes, values and lifestyles for 50 years, creating cutting-edge expertise and the largest database of U.S. consumer attitudes and trends. The Yankelovich brand name is widely recognized by Fortune 1000 marketers as a leading source of consumer insights, particularly consumer trend data in the United States. Yankelovich consumer segmentation research and consulting services provide deep consumer behavioral expertise to marketers as well as actionable data to employ in targeted marketing strategies. More information is available at www.yankelovich.com .

About Henley Centre HeadlightVision

Henley Centre HeadlightVision is Europe's leading consumer trends business. We provide intelligence, research and consultancy solutions to blue chip clients around the world. Our mission is to help our clients create better futures. All of our work is informed by our proprietary global knowledge base of consumer trends and futures insights. We have a global footprint with offices in London, New York, Mumbai and Delhi and an intelligence network that spans more than 28 countries. More information is available at www.hchlv.com .

About Kantar

Kantar is one of the world's largest research, insight and consultancy networks and part of the WPP Group. We help clients make better business decisions through a deeper understanding of their markets, their brands and their customers. Kantar brings together a diverse group of outstanding marketing insight and consulting companies -- each an expert in their field who can work together seamlessly to help clients address business issues in an holistic and strategic way.

Companies include Added Value Group, AMRB, BMRB, BPRI, Cannondale Associates, Center Partners, Glendinning Management Consultants, Henley Centre Headlight Vision, IMRB, Kantar Operations, KMR Group, Lightspeed Research, MVI, Mattson Jack Group, Millward Brown, Research International, RMS and Ziment Group. The Group has 22 companies operating in 70 countries worldwide. More information is available at www.kantargroup.com .

About WPP

WPP is one of the world's leading communications services groups, providing national, multinational and global clients with advertising; media investment management; information, insight & consultancy; public relations & public affairs; and branding & identity, healthcare and specialist communications. WPP's worldwide companies include JWT, Ogilvy & Mather Worldwide, Y&R, Grey Worldwide, The Voluntarily United Group of Creative Agencies, MindShare, Mediaedge:ia, MediaCom, Millward Brown, Research International, KMR Group, OgilvyOne Worldwide, Wunderman, 141 Worldwide, Grey Direct, Hill & Knowlton, Ogilvy Public Relations Worldwide, Burson-Marsteller, Cohn & Wolfe, GCI, CommonHealth, Sudler & Hennessey, Ogilvy Heathworld, Grey Healthcare Group, The Brand Union, Landor, G2 Worldwide and Fitch, among others. Collectively, WPP employs 100,000 people in more than 2,000 offices in 106 countries. More information is available at www.wpp.com .