October 07, 2009 10:18 ET

Most Europeans Expect Slow Recovery, According to New AlixPartners Survey

But Survey Suggests Post-Recession Growth Opportunities for U.S. Businesses

NEW YORK, NY--(Marketwire - October 7, 2009) - While government officials and economists in both the U.S. and Europe may have called a possible end to the recession, European consumers aren't seeing it that way. A recent survey of approximately 5,000 adults across five European countries by AlixPartners LLP, the global business advisory services firm, shows widespread pessimism about the current economic situation, with only 38% expecting to see a full recovery before 2012 at the earliest. However, while European consumers are cutting back on discretionary spending and delaying major purchases, when recovery does come, very few (10%) expect these cutbacks to be permanent, which could be a silver lining for those doing business in, or exporting to, Europe.

These latter findings are in stark contrast to the results of a similar survey of Americans conducted earlier in 2009 by AlixPartners. Matthew Katz, a managing director of AlixPartners and leader of the firm's retail practice, observed, "When we surveyed Americans in the spring, we found that consumers here expected to be making long-term changes in their spending patterns. Our findings for U.S. consumers suggested long-term 'new normal' spending levels of as low as 86% of what they were before the crash. And today, current mixed macroeconomic signals don't suggest a recovery in consumer spending in the U.S. has taken hold."

Among the other findings, the AlixPartners survey turned up the following:

--  More Europeans feel their own personal situation is getting worse
    rather than better, including a third of those in each of France, Italy and
    the UK.
--  Confidence in personal financial situations are closely connected to
    1) a decrease in the overall cost of living; 2) increases in basic salaries
    and 3) falling unemployment.
--  The majority of respondents have not changed their personal debt
    levels as a result of the recession.  Italians are most likely to have
    increased their debt (27%) while Swedes are most likely to have decreased
    it (12%).
--  Respondents from the UK were least likely to have confidence in their
    government to improve their country's economy (14%), while the French were
    most likely to have confidence in themselves as individuals to improve both
    their own situations (69%) and their country's (63%).
--  Europe's biggest winners in the current recession were supermarkets
    brand groceries, discount stores, use of public transportation, watching TV
    and use of landline for telephone calls.
--  The biggest losers in the recession were coffee shop visits, purchases
    of home furnishings, shopping at premium stores, purchase of take-out food,
    premium brand groceries, eating out.

Besides measuring consumer attitudes and expectations, the survey asked about current spending patterns in Europe. AlixPartners found that the greatest cutbacks have been in dining out -- as was the case in AlixPartners' U.S. survey last spring -- followed by premium groceries, and that more than a third of those polled had delayed a major purchase as a result of the recession.

Once the recovery comes, however, Europeans expect to be eating out as often and at the same level as before, and assume that the furniture or car or home that they did not purchase this year will be bought then.

"This study suggests that the post-recession rebound, when it comes, may be substantially higher in Europe than in the United States," said Stefano Aversa, co-president of AlixPartners. "This is something that American businesses will need to pay close attention to, both as a challenge in terms of appealing to a European consumer currently less willing to spend, and as an opportunity, when spending levels once again normalize."

About the Study

The AlixPartners 2009 European Economic Outlook(SM) survey was produced in collaboration with Brunswick Research. Brunswick Research specializes in exploring opinion leader and public attitudes towards companies and topical debates; it is the opinion research practice of Brunswick Group PLC. The findings do not necessarily reflect the views of AlixPartners or Brunswick Group.

A nationally representative quota sample of around 1,000 adults aged 18+ in each of France, Germany, Italy, Sweden and the UK were interviewed online between August 19 and 31, 2009. Data have been subsequently weighted to reflect national population profiles. Where an overall European figure is quoted, this represents a simple average of results from each of the five countries surveyed.

About AlixPartners

AlixPartners is a global business advisory firm offering comprehensive services to improve corporate performance, execute corporate turnaround, and provide litigation consulting and forensic accounting services. The firm has more than 900 professionals in 14 offices across North America, Europe and Asia, and is on the Web at www.alixpartners.com.

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