October 12, 2009
By Phil Lempert
Hispanics cope with their economic hurts Hispanic households have suffered in some ways more than Whites or African-Americans in this harsh recession. On other measures, their economic pain has roughly equaled that of other population segments.
Hispanics, who came into the tough economy disadvantaged, were especially bedeviled by sub-prime mortgages. These high-interest rate loans sucked cash from their comparatively low monthly intake and hurt their confidence about being able to feed their families.
As a result, some 94% of Hispanic consumers said they worry about the rising cost of food, according to a Nielsen survey of both English- and Spanish-speaking members of its Homescan Hispanic Panel, which was done to "better understand how they were dealing with hard times," wrote Dan Aversano, senior product manager, Nielsen, in a blog post that details their current situations and coping strategies.
With respect to food, Hispanics "are going back to basics and becoming increasingly more discerning about what they need versus what they want," he noted. Between second quarter 2008 and second quarter 2009, Hispanics made about nine percent fewer trips to the store (on a total U.S. all-outlet basis). They did spend about two percent more per visit, but aimed spending cutbacks at non-food purchases—the largest declines occurred in general merchandise, health and beauty care and other non-edible categories.
By contrast, both store brands (most pronounced growth in food products) and bodegas, the small, convenient grocers in Hispanic neighborhoods, benefited from the stagnant economy. Aversano said bodegas drew four percent more trips and 17% higher spend-per-trip over this past year.
Since F3 sees bodegas filling in where supermarkets rarely go (in poorer areas, sometimes referred to as food deserts that lack many good nutritional choices for neighborhood residents), their improved fortunes are understandable. Also consider the difficulty many Hispanics face in taking the bus to supermarkets and carrying purchases home along their route, and this pro-bodega trend has little reason to end.
While F3 is also aware that Hispanics play a significant role in the underground economy—where workers are paid cash for labor such as house cleaning, house painting, landscaping, maintenance and agricultural harvest services—some of the official data outlined in Aversano's blog depict conditions that cash payments can't easily overcome.
For example:
# At the peak of the sub-prime market, the number of loans sold to Hispanics increased about 170% compared to 110% for Whites and 120% for African Americans, the Pew Hispanic Center reported. Interest rates on home loans were nearly 2.5 percentage points higher than a conventional mortgage. By the end of 2008, one in 10 Hispanic households fell behind on payments, and about three percent reported receiving foreclosure notices, according to the Nielsen survey.
# Hispanics experienced a 12.3% unemployment rate in July 2009, compared with 8.6% for Whites and 14.5% for African Americans, said the Bureau of Labor Statistics. The data reflect an uptick in Hispanic unemployment from June (12.2%), compared with downticks among Whites (8.7% in June) and African Americans (14.7% in June).
# Just 63% of Hispanics told Nielsen they feel "somewhat/very secure" in keeping their jobs, compared with 72% of the non-Hispanic population.
# Most Hispanics (56%) feel "much/somewhat worse off" financially, compared with non-Hispanics (54%), the Nielsen data showed.
Source: Phil Lempert-Facts, Figures & The Future
By Phil Lempert
Hispanics cope with their economic hurts Hispanic households have suffered in some ways more than Whites or African-Americans in this harsh recession. On other measures, their economic pain has roughly equaled that of other population segments.
Hispanics, who came into the tough economy disadvantaged, were especially bedeviled by sub-prime mortgages. These high-interest rate loans sucked cash from their comparatively low monthly intake and hurt their confidence about being able to feed their families.
As a result, some 94% of Hispanic consumers said they worry about the rising cost of food, according to a Nielsen survey of both English- and Spanish-speaking members of its Homescan Hispanic Panel, which was done to "better understand how they were dealing with hard times," wrote Dan Aversano, senior product manager, Nielsen, in a blog post that details their current situations and coping strategies.
With respect to food, Hispanics "are going back to basics and becoming increasingly more discerning about what they need versus what they want," he noted. Between second quarter 2008 and second quarter 2009, Hispanics made about nine percent fewer trips to the store (on a total U.S. all-outlet basis). They did spend about two percent more per visit, but aimed spending cutbacks at non-food purchases—the largest declines occurred in general merchandise, health and beauty care and other non-edible categories.
By contrast, both store brands (most pronounced growth in food products) and bodegas, the small, convenient grocers in Hispanic neighborhoods, benefited from the stagnant economy. Aversano said bodegas drew four percent more trips and 17% higher spend-per-trip over this past year.
Since F3 sees bodegas filling in where supermarkets rarely go (in poorer areas, sometimes referred to as food deserts that lack many good nutritional choices for neighborhood residents), their improved fortunes are understandable. Also consider the difficulty many Hispanics face in taking the bus to supermarkets and carrying purchases home along their route, and this pro-bodega trend has little reason to end.
While F3 is also aware that Hispanics play a significant role in the underground economy—where workers are paid cash for labor such as house cleaning, house painting, landscaping, maintenance and agricultural harvest services—some of the official data outlined in Aversano's blog depict conditions that cash payments can't easily overcome.
For example:
# At the peak of the sub-prime market, the number of loans sold to Hispanics increased about 170% compared to 110% for Whites and 120% for African Americans, the Pew Hispanic Center reported. Interest rates on home loans were nearly 2.5 percentage points higher than a conventional mortgage. By the end of 2008, one in 10 Hispanic households fell behind on payments, and about three percent reported receiving foreclosure notices, according to the Nielsen survey.
# Hispanics experienced a 12.3% unemployment rate in July 2009, compared with 8.6% for Whites and 14.5% for African Americans, said the Bureau of Labor Statistics. The data reflect an uptick in Hispanic unemployment from June (12.2%), compared with downticks among Whites (8.7% in June) and African Americans (14.7% in June).
# Just 63% of Hispanics told Nielsen they feel "somewhat/very secure" in keeping their jobs, compared with 72% of the non-Hispanic population.
# Most Hispanics (56%) feel "much/somewhat worse off" financially, compared with non-Hispanics (54%), the Nielsen data showed.
Source: Phil Lempert-Facts, Figures & The Future
