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

Strategy Briefing

About This Report

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

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
     

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  • Identify factors driving change now and in the future
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  • Briefings and presentation should provoke lively discussion at senior level
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Downsizing Globally: The Impact of Changing Household Structure on Global Consumer Markets

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