Although consumer optimism is currently high, according to Nielsen’s recent global Consumer Confidence Index reports, private label sales continue to grow. So why are shoppers spending less even when the economy is doing better? The report found that, when shoppers turn to low-cost products like private label to save money during times of economic depression, they adapt to and accept these new shopping patterns and don’t revert to their old ones even when the depression ends.
“When coming out of economic downturns, consumers will maintain a more cautious approach with regard to household expenses, having developed a habit of seeking and expecting value for their money,” according to the report. “Private-label is also a new opportunity in developing countries, faster-growing economies and countries recovering from economic decline or stagnation. Therefore, looking ahead, private-label brands have several avenues for future growth around the globe.”
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That trend is expected to accelerate over the next decade, as companies and workers seek more flexibility through temporary work arrangements. But that also raises big questions about the future of the safety net: According to the poll, 51 percent of freelance and contract workers do not receive benefits common to many full-time jobs — sick leave, unemployment insurance or retirement savings.
Pay restraint put Germany back on track but at a cost. It has left the economy more unbalanced than ever. Exports are super-competitive. In last year’s annual health-check, the IMF said Germany’s real effective exchange rate was undervalued by 10-20%. Consumer spending, meanwhile, remains depressed. Despite abundant jobs growth, the share of GDP going to households has fallen from 65% in the early 1990s to 60% or below, to the benefit of corporate profits (see chart 4). The rate of household saving, however, has not changed much: it is currently 9.8%, exactly in line with its 20-year average.
I figure I would link to this article because its in my market specialization and I have no posted much business related news on my site thus far. A lot of companies might have some apprehensions when dealing with Chinese manufacturing especially due to the cultural and language differences. Enjoy.