Downsizing Globally: The Impact of Changing Household Structure on Global Consumer Markets

April 2013

Despite ever rising living costs and the inability of many young adults to fly the nest while times are hard, the global trend towards smaller and less conventional household units continued apace over the review period, driven by lower marriage and fertility rates, ageing populations, rapid urbanisation and rising wealth in emerging markets. This new global report analyses household statistics and behaviour, and suggests how these may shape demand and impact marketers in the future.

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Household trends

Globally, household formation exceeded population growth over the 2007-2012 period. Household numbers increased by 9% to 1.9 billion, led by China, India and the US, with 434 million, 233 million and 120 million households, respectively, in 2012.


Household growth was most rapid in developing markets, such as Mexico, Malaysia, Venezuela, Thailand and Turkey, fuelled by rising incomes and a high level of urbanisation.
Despite the necessity for recession-hit families to combine households in order to save resources over the review period, globally, the overall trend towards single and two-person households and single-parent households continued.


Couples with children still accounted for the largest share of households, at 43%, but couples without children and single-person households increased their shares to almost 17% and 15%, respectively.


Between 2007 and 2012, the average number of household members remained static on a global level, at 3.7, although most countries experienced a slight decline.

The long-term trend towards smaller household units has been due to a combination of factors, including urbanisation and rising wealth in developing markets, lower marriage and fertility rates, a rise in divorce rates and ageing populations. Single households are most common in Northern Europe, where living standards are already very high. They accounted for more than 38% of all households in Sweden, Norway, Denmark and Germany in 2012.


At the same time, in more traditional societies, such as Malaysia, China, Venezuela, India and Turkey, where extended family structures are still common, single-person households represented less than 8% of the total. 


The shift towards living solo is most pronounced in the big urban centres. It is estimated that more than 50% of households in Munich, Frankfurt and Paris are single, while in the US, single households were most common in Atlanta and Washington, DC in 2012.


One- and two-person households tend to have a steady source of income with no family responsibilities, and hence have significant potential for spending on discretionary items.
Two-person households consist mainly of “empty nesters” and DINKs (double income no kids). Empty nesters are thought to have become fewer since the start of the recession, as young people are staying longer in the family home due to a lack of job prospects.


In developing markets, multigenerational households, which were once the norm, are becoming less common as living standards rise and young people sever ties with families to move to cities in search of work

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings
     

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Delivery format

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EXECUTIVE SUMMARY

Household trends
Chart 1 Global Households by Type 2007/2012
Factors affecting household structure
Household behaviours
Outlook

NUMBER AND TYPE OF HOUSEHOLDS

Total number of households
Households grow faster than population Stagnation in the US Chart 2 Household Versus Population Growth by Country 2007/2012 Table 1 Number of Households by Country 2007/2012
Households by type
Nuclear units increasingly common Single households more common in Northern Europe Single households spend more and save less Two-person households – from DINKs to empty-nesters Traditional households still the norm in China and India Table 2 Households by Type, by Country 2012
Households by Size
Fewer occupants Emerging markets retain traditional extended family structure Germany has smallest households Chart 3 Number of Occupants Per Household by Country 2012 Dwelling sizes stabilise Table 3 % Households by Number of Rooms by Country 2012

FACTORS AFFECTING HOUSEHOLD STRUCTURE

The delaying of family life
Lower marriage and birth rates Children unwilling to fly the nest Chart 4 Birth Rates by Region 2012 Chart 5 Average Age of Women at First Marriage by Country 2012
Ageing populations
Fewer children, longer lives Japan has the oldest population Impact on household structure Spending power may fall Older households receive family support in India Japan earthquake disaster strengthens family ties UK’s elderly labelled as “bedroom blockers” Ageing households provide opportunities for service providers Robots help elderly Japanese Active-adult developments burgeon in the US and Australia Opportunities in the consumer goods market Chart 6 % Households with Head of Household Over Age of 50 2007/2012 Table 4 % Households by Age of Head of Household 2012
The rise of the single lifestyle
Almost a third of the population is unmarried Brazil has the most singletons Potential for discretionary spend Travel for singles Encouraging single diners Singles shop locally Chart 7 % Population Aged 15+ who are Single or Divorced by Country 2007/2012
The “boomerang children” phenomenon
Young people unable to move Living with parents means a higher quality of life Opportunities for marketers
Rise of non-traditional households
Households less easy to pigeonhole Catering to single parents
The rise in same-sex households
Attitudes become more liberal More countries legalise gay marriage High spending power Opportunities in the luxury market
The property market
Housing crash slow to recover US market picks up UK market stabilises Spanish prices still in freefall Government programme stimulates Brazilian housing market Renting on the increase Chinese increasingly able to afford their own properties Chart 8 Rented Households as a % Total Households 2012
The effects of urbanisation
Space at a premium in large cities China’s cities see rapid growth Pressure on resources Social unrest Chart 9 Urban Households as a % of All Households 2007/2012 The shift to apartments Space at a premium in Tokyo Growing demand for space-saving appliances Chart 10 Apartments as a % of All Households 2007/2012
The home as a work base
The rise in teleworking UK companies employ home workers to cut costs Impact on home requirements

HOUSEHOLD BEHAVIOUR

Expenditure patterns
Spreading the costs Two person households spend most per head in China Table 5 Consumer Expenditure Per Household Member by Household Size 2012
Shopping habits
Price and quality are of top priority among all households types DINKS are in a better position to splurge Chart 11 Importance of Various Purchasing Criteria by Household Type (Global) Discounters benefit from search for value Loyalty schemes attract family shoppers Mums at the mall Chart 12 Shopping Habits by Household Type (Global)
Attitudes to health
Chart 13 Attitudes to Health by Household Type (Global)
Eating habits
Chart 14 Eating Habits by Household Type (Global)
Trends in ready meals
Singles attracted to the convenience of ready meals Packaging becomes more user-friendly Table 6 Global Sales of Ready Meals by Category 2007/2012
Trends in 100% home delivery/takeaway
Market driven by desire for cocooning and convenience Bi-polarisation of the market Table 7 Global Sales of 100% Home Delivery/Takeaway by Category 2006/2011
Dining trends
Families seek value dining experiences Young singles help fill off-peak day-parts Chart 15 Frequency of Eating Out for Dinner by Household Type (Global) Singles in emerging markets dine out frequently Chart 16 Frequency of Eating Out for Dinner by Household Type (By Country)
Internet use
Shared households are heaviest internet users Families enjoy convenience of online shopping Chart 17 internet Usage by Household Type (Global)

MAJOR MARKET TRENDS

Brazil
Household structure Chart 18 Brazil: Households by Type 2007/2012/2017 Spending by household type Table 8 Brazil: Expenditure by Household Type 2012 Attitudes to health and eating Chart 19 Brazil: Attitudes to Health and Eating Habits by Household Type
China
Household structure Single women stigmatised Chart 20 China: Households by Type 2007/2012/2017 Spending by household type Table 9 China: Expenditure by Household Type 2012 Attitudes to health and eating Eating out is cheap and convenient Solo dwellers shun ready meals Chart 21 China: Attitudes to Health and Eating Habits by Household Type
France
Household structure Chart 22 France: Households by Type 2007/2012/2017 Spending by household type Table 10 France: Expenditure by Household Type 2012 Attitudes to health and eating Singles prefer home cooking Chart 23 France: Attitudes to Health and Eating Habits by Household Type
Germany
Household structure Lone parents on the increase Chart 24 Germany: Households by Type 2007/2012/2017 Spending by household type Table 11 Germany: Expenditure by Household Type 2012 Attitudes to health and eating Chart 25 Germany: Attitudes to Health and Eating Habits by Household Type
India
Household structure Solo living still rare Chart 26 India: Households by Type 2007/2012/2017 Spending by household type Table 12 India: Expenditure by Household Type 2012 Attitudes to health and eating Consumers prefer fresh ingredients Chart 27 India: Attitudes to Health and Eating Habits by Household Type
Japan
Household structure Gender roles still traditional Chart 28 Japan: Households by Type 2007/2012/2017 Spending by household type Table 13 Japan: Expenditure by Household Type 2012 Attitudes to health and eating Health supplements popular Chart 29 Japan: Attitudes to Health and Eating Habits by Household Type
UK
Household structure Families getting smaller The UK heads Europe for children in lone parent families Chart 30 UK: Households by Type 2007/2012/2017 Spending by household type Empty nesters prioritise travel Table 14 UK: Expenditure by Household Type 2012 Attitudes to health and eating Consumers cut costs by cooking from scratch House-sharers most likely to order takeaways Chart 31 UK: Attitudes to Health and Eating Habits by Household Type
US
Household structure More households formed in 2012 Different types of single household Cohabiting on the rise Single-parent families Chart 32 US: Households by Type 2007/2012/2017 Spending by household type Table 15 US: Expenditure by Household Type 2012 Attitudes to health and eating Chart 33 US: Attitudes to Health and Eating Habits by Household Type

OUTLOOK

More households, fewer occupants
Chart 34 Forecast Number of Households by Type 2012/2017
More single units
Table 16 Forecast Number of Single-Person Households by Country 2012/2017
Young adults await economic recovery before moving out
Ageing households
Table 17 Forecast % Households by Age of Head of Household 2012/2017
Growth of urban households
Emerging market cities will become ever larger Apartments will become ever smaller Chart 35 Urban Households as a % of All Households 2012/2017
A rise in renting
A trend towards “super-cocooning”
Opportunities for marketers
A different approach to marketing Downsizing for singles Adapting retail formats Catering to the needs of squeezed families Multi-households will drive electronics growth Summary 1 Opportunities Provided by Changing Household Structures
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