Uncertainty about the increasingly likely US-led war on Iraq, together with continuing concerns over terrorism, are troubling consumers. This state of fear has repercussions on consumer purchasing behaviour, encouraging cutbacks on some products and the stockpiling of others.
It is possible that later this week, the UN Security Council will vote on a resolution authorising the use of force on Iraq. The long, drawn out nature of the process and the uncertainty that has surrounded this situation for a year has left many consumers feeling uneasy, insecure or quite simply scared. This general climate of fear has been growing ever since the Al Qaeda attacks on New York in September 2001, and the subsequent war with Afghanistan, which has since been linked to a likely conflict in the Persian Gulf.
Fear of impending conflict and the perceived links with terrorist activity generally lead to reduced consumer spending. The sense of insecurity also encourages people to stick with well-known brands, to spend more on reassuring products that they trust.
Sales of confectionery - and especially chocolate - have benefited from consumer unease. Traditionally, chocolate has always enjoyed healthy sales in such circumstances. When consumers are insecure, they often seek solace in 'comfort' products. For many, this means reaching for a chocolate bar.
In the US, this climate of fear has taken on another dimension, as the government has recommended that people should equip themselves with a 'home security kit' to be prepared in the event of a biological or chemical attack. In practice, this has meant a boom in the sales of canned foods, bottled water - and battery-powered torches.
However, fear of terrorism and war is quite low down the list of consumers' anxieties. Fear of crime and food safety concerns have a far greater impact on their purchases. Food safety in particular drives consumers to eat less meat and dairy products, to buy fresh foods rather than ready-meals, and to generally improve the quality of their diet.
Related Research: Datamonitor, "Alleviating Fears - New Consumer Insight" (DMCM0355)
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