The global recession that began in 2008 has not gone away, at least not in Europe. The biggest economic change is a long-term shift in the balance of economic power, primarily towards Asia.
Western consumers, especially those in parts of Europe, are coming to terms with the fact the days of increasing affluence may be over. Many European consumers are already adapting their lives to this austerity and adjusting their spending accordingly. The first part of this new century was a period of economic growth in Europe, particularly with the incorporation of the new Member States.
Since 2008, the boom times have gone as Europe has been seriously affected by the global credit crunch with growing unemployment and a slump in consumer demand, particularly in the Central and Southern European countries. Since 2008, European retail sales decreased by an average of 1.6% to € 2,610 billion in 2011.
Various phrases characterise this change e.g. downsizing, better budgeting, and cutting your coat to match your cloth (only spending what you can afford). However, the bottom line is that people now have to make their money work harder for them.
People want to make sure they are getting the best possible value in their purchases. There has already been a growth in promotional voucher companies such as Groupon that offer discounts across all sorts of goods and services. Getting a bargain is now integral to how consumers think when they spend. Getting a good deal is now seen to be something to be proud of rather than an embarrassment.
Other repercussions of the age of austerity include the increase in repair services (clothes, shoes) that extend the life of products. Internet sales are likely to grow further as internet kiosks expand on the high street. People are shopping at large hypermarkets less frequently, and save time by shopping at home when they want thereby saving the money which they otherwise would have spent on fuel to drive there.
There will be more auction websites such as eBay where people sell things of relatively low value where previously they would not have bothered; the growth of loan companies and the return of pawnbrokers will continue as people struggle to pay off debts.
Another repercussion is the growth in low cost holidays such as camping, where there is a partial relationship with environmental changes, such as climate change.
Some consumers are also choosing to downsize, or rationalise a lifestyle involving lower spending as they blame the age of materialism and excess on global warming.