Industry and retail react to prevent middle class from stopping buying
Valor Econômico 04/08/2009
The behavior of the Brazilian middle class is changing quickly, in an answer to a setting that mixes economic crisis and indebtedness. The consumer is reducing the frequency s/he goes shopping in the supermarkets; and has started changing some of the brands s/he has always used for cheaper ones. All that in order to save money. The next step - should it be required to save even more within the next weeks - is to stop buying some categories of products. Concerned with that possibility, the industry of consumption goods as well as the retail are really working wonders: launching family size packages, different versions of the same product, increasing the variety of their own brands and even chasing clients at their doors.
According to a recent survey made by LatinPanel, 89% of the C class consumers (family income between R$ 1.1 thousand/US$ 478.3 and R$ 1.6 thousand/US$ 695.7) were paying some debt in 2008. The problem is that this part of the population, according to Nielsen, represents 44% of the economically active people of the country. "Should the crisis get to the third stage of the economy process, in other words, from the change of brands to cutting expenditures, it will be very bad", affirms Ricardo Alvarenga, market analyst at Nielsen. That is the step the industry and the retail want to prevent the consumer from taking. "This is a different moment of the economy that requires different answers, for different categories of product. Those who just sit and do nothing, will lose market", says Eduardo Ragasol, new CEO of Nielsen Brasil.