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The Brazilian Economy - Changes in Saving and Spending Habits - Brazil - July 2016

“The recession, with higher inflation and interest rates, more difficult access to credit, and rising unemployment has made consumers change their spending and saving habits. While consumers look for deals, plan their purchases, and cut back on nonessential items, they are also being more careful when it comes to getting in debt and prioritizing saving for emergency situations.”
– Renata Pompa de Moura, Research Manager

This report discusses the following key topics:

  • Targeting those that feel bad when they overspend
  • Outlet malls have potential to target moms
  • Are Brazilians ready for wearable payment devices?

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • The consumer
            • Cash the preferred payment method
              • Figure 1: Payment preferences, February 2016
            • Consumers in search of deals
              • Figure 2: Spending habits, February 2016
            • Focusing on purchasing the essentials
              • Figure 3: Changes to saving habits, February 2016
            • Despite the current economic situation, saving is still important
              • Figure 4: Saving habits, February 2016
            • What we think
            • Issues and Insights

              • Targeting those that feel bad when they overspend
                • The facts
                  • The implications
                    • Outlet malls have potential to target moms
                      • The facts
                        • The implications
                          • Figure 5: McDonald’s Play with Me campaign, January 2015
                        • Are Brazilians ready for wearable payment devices?
                          • The facts
                            • The implications
                                • Figure 6: Visa and Bradesco payment wristband and Kerv payment ring
                            • The Market – What You Need to Know

                              • 2016 projections – GDP and inflation
                                • Consumers are slightly less pessimistic about the future
                                  • Unemployment remains stable in the past two quarters
                                    • Debt declines while interest rates remain high
                                    • Market Drivers

                                      • GDP projection for 2016 gets a little improvement
                                        • Inflation: Still above the target for the year
                                          • More than 11 million Brazilians are unemployed
                                            • Figure 7: Unemployment rate in moving quarters, 2015 and 2016
                                          • Consumers see a brighter future ahead
                                            • Overall debt is declining
                                              • Figure 8: Overall amount of debt of Brazilians, 2013, 2014 and 2015
                                            • Interest rates remain high
                                              • Interest rates on credit cards achieve a record high
                                                • Figure 9: Interest rates on credit cards, annual percentage rate, May 2015-May 2016
                                              • 70 million seniors by 2050
                                              • The Consumer – What You Need to Know

                                                • Brazil: Still far from becoming a cashless society
                                                  • Durability is also a key factor for consumers
                                                    • Young males: The entry pathway for mobile payment systems
                                                      • Big pack savings: More appealing to AB consumers
                                                        • Millennials are more inclined to plan their purchases
                                                          • Savings: An important topic for parents and kids
                                                            • Saving for emergencies takes the lead over saving for retirement and specific reasons
                                                            • Payment Preferences

                                                              • Cash the preferred payment method
                                                                  • Figure 10: Payment preferences, February 2016
                                                                • Consumers are using credit cards for big purchases
                                                                    • Figure 11: Payment preferences, February 2016
                                                                    • Figure 12: Nubank card and app, February 2015
                                                                  • Young consumers are the most likely to pay for eating out with cash
                                                                    • Figure 13: Preference for using cash, by eating out purchases, February 2016
                                                                    • Figure 14: Vlip app that streamlines ordering and payment processes in restaurants
                                                                  • Women more likely than men are to pay for groceries and eating out with cash
                                                                    • Figure 15: Payment preferences for cash and debit/prepaid card, by eating out and grocery shopping, February 2016
                                                                • Spending Habits

                                                                  • Consumers in search of deals
                                                                    • Figure 16: Spending habits, February 2016
                                                                  • Durability surpasses price for many consumers
                                                                    • Young consumers are the most likely to buy regardless of price
                                                                      • Figure 17: Agreement with the statement “I would buy whatever I need regardless of the price,” by age group, February 2016
                                                                    • Mobile payment systems: More appealing to young males
                                                                      • Figure 18: Agreement with the statement “I would be interested in using mobile payment systems (ie, paying by tapping a smartphone against the store’s payment terminal)”, by gender and age, February 2016
                                                                  • Changes to the Saving Habits

                                                                    • Focusing on purchasing the essentials
                                                                      • Figure 19: Changes to saving habits, February 2016
                                                                    • ABs are the most likely to buy big economy packs
                                                                      • Figure 20: Changes to saving habits, “I’ve been buying big economy packs more than single packs,” by socioeconomic group, February 2016
                                                                      • Figure 21: Great Value Green Peas, in resealable pack, Canada, May 2016
                                                                    • Millennials are planning their purchases
                                                                      • Figure 22: Changes to saving habits, “I plan my purchases before going to the shops,” by age group, February 2016
                                                                      • Figure 23: Pavlok wristband, 2016
                                                                  • Saving Habits

                                                                    • Despite the current economic situation, saving is still important
                                                                        • Figure 24: Saving habits, February 2016
                                                                      • Seniors: The least likely to save
                                                                        • Figure 25: Agreement with the statement “I try to save some money each month,” by age group, February 2016
                                                                        • Figure 26: Agreement with the statement “there is no point saving when prices are rising,” by age group, February 2016
                                                                      • Teaching kids to save is important to many Brazilians
                                                                        • Saving for retirement is not a priority
                                                                          • Figure 27: Agreement with the statement “I am saving for my retirement,” by age group, February 2016
                                                                        • Saving for emergencies is more common than for a specific reason
                                                                          • Figure 28: Agreement with the statements “I am saving for emergency situations” and “I am saving for a specific reason (eg, holiday, buying a car, etc),” February 2016
                                                                      • Appendix – Abbreviations

                                                                        • Abbreviations

                                                                        Companies Covered

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                                                                        The Brazilian Economy - Changes in Saving and Spending Habits - Brazil - July 2016

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