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Italian Consumers Tighten Their Belts 

Andreas Bartels 

Grassroots℠ Research 

7/15/2013 

A new Grassroots℠ Research poll shows that Italians see their economy weakening further, prompting them to cut back on discretionary spending such as dining out, shopping for clothes and buying a new car. Analyst Andreas Bartels goes inside the numbers.
Periodically, GrassrootsSM Research interviews Italian consumers to evaluate changes in consumer sentiment and

Where Italian Consumers Plan to Cut Back
If you plan to reduce household spending in the next
six months, in which areas are you likely to cut back?
Restaurants/Dining Out
15%
Clothing
14%
New Automobile
13%
Travel/Vacation
12%
Entertainment
10%
Home Improvement
9%
Will not reduce household spending
7%
Electronics/Computers
6%
Telecom Services
5%
Books/Music/Videos
5%
Groceries
3%
Source: GrassrootsSM Research report as at April 2013

spending trends. The results from an April 2013 survey of more than 400 consumers indicate that perceptions of Italy's economy are poor, while household financial situations are relatively stable. Savings rates are comparatively stable as well, and Italians believe they are doing better than the country as a whole. However, respondents are less optimistic about the economy vs. six months ago. Most believe the economy will deteriorate further. This can explain the tendency to spend less, especially on restaurants, clothing and automobiles.

Stefan Raetzer, senior portfolio manager of the European equities team, commented "… we as portfolio managers should stay cautious on strongly domestic-oriented stocks. The Italian market trades at a 20-30 per cent discount on various multiples – but for a reason!" And, as ECB head Mario Draghi indicated, the economic situation in the peripherals will get worse before it gets better.




The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

 
Grassroots℠ Research is a division within the Allianz Global Investors group of companies that commissions investigative research for asset management professionals. Research data used to generate Grassroots℠ Research reports are received from reporters and field force investigators who work as independent, third party research providers, supplying research that is paid for by commissions generated by trades executed on behalf of clients.

Allianz Global Investors Distributors LLC, 1633 Broadway, New York NY, 10019-7585, us.allianzgi.com, 1-800-926-4456.

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