Life satisfaction dips as living costs rise and leaders fail to impress

SATISFACTION with life is wavering for the first time in 20 years, driven partly by concerns over the cost of living, but also by a perceived lack of leadership in both the political and business worlds.

By InvestSMART · 23 Sep 2011

By InvestSMART ·
23 Sep 2011

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Despite low unemployment, low interest rates and a strong dollar, many people's satisfaction with life is starting to slip, states a long-running survey of about 13,000 people conducted by the advertising agency Grey Group, and Sweeney Research.

This lack of satisfaction was translated into more cautious spending. The report described people as "more prudent, savvy shoppers". More people reported buying house-brand goods, which 65 per cent said were equal in quality to other brands. And 78 per cent said they bought as many things on sale as possible, up from 67 per cent in 1992, during the recession.

The top three cost of living issues "keeping people awake at night" were home affordability, retirement and personal finances.

Interestingly, 74 per cent said Coles and Woolworths had too much dominance, prompting the report's authors to question whether big retailers might be the next area of consumer backlash.

The Grey Group's chairman, Paul Gardner, said for the first time the annual survey had found that consumer satisfaction was not following the key economic indicators.

"We've actually got fairly buoyant economic times ... yet satisfaction is starting to dip," he said. "Part of this has to do with the rising cost of living, [such as] gas, electricity. Part of this also has to do with home affordability: will my kids ever be able to afford a home near the city?

"But there is also a perceived lack of leadership in this country.".

The report said the results were a clear call for strong leadership, vision and purpose.

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Frequently Asked Questions about this Article…

What did the recent Grey Group and Sweeney Research survey find about Australians' life satisfaction?

The long-running survey of about 13,000 people found that satisfaction with life is dipping for the first time in 20 years. The report links the decline partly to rising cost-of-living concerns and a perceived lack of leadership in politics and business, even though indicators like low unemployment, low interest rates and a strong dollar remain positive.

How is the dip in consumer satisfaction affecting household spending and shopping habits?

The report says consumers are becoming more cautious and are described as "more prudent, savvy shoppers." More people reported buying house-brand goods (65% said house brands were equal in quality) and 78% said they bought as many items on sale as possible, up from 67% in 1992, indicating tighter, value-driven spending patterns.

Which cost-of-living issues are worrying people the most, and why does that matter for investors?

The top three issues keeping people awake are home affordability, retirement and personal finances. For everyday investors, those concerns can translate into more conservative consumer behaviour, greater demand for value products and potential pressure on sectors tied to discretionary spending and housing.

What did the survey say about Coles and Woolworths, and could that signal a retail backlash?

The report found that 74% of respondents think Coles and Woolworths have too much dominance. The authors suggest this could make big retailers a potential focus of consumer backlash, which is a trend investors in supermarket and retail stocks may want to watch.

Why is it surprising that satisfaction is dipping despite a strong economy?

Grey Group chairman Paul Gardner noted that economic indicators (low unemployment, low rates, strong dollar) are quite buoyant, yet satisfaction is falling. He attributes this gap partly to rising everyday costs like gas and electricity, housing affordability worries, and a perceived lack of leadership — factors that don’t always show up in headline economic data.

What investor takeaways does the report imply about consumer behaviour and company performance?

The report implies investors should monitor shifts toward value purchases (house brands and sales), potential consumer pushback against dominant retailers, and how companies respond with pricing, leadership and purpose. These behavioural trends can affect revenue mix and brand strength across retail and consumer sectors.

Who conducted the survey and how robust is the sample size?

The annual survey was conducted by the advertising agency Grey Group together with Sweeney Research and covered about 13,000 people — a large sample that the report’s authors use to highlight meaningful shifts in satisfaction and consumer sentiment.

How might perceptions of leadership in business and politics influence markets and investor decisions?

The report stresses a perceived lack of leadership as a driver of lower satisfaction. For investors, weak confidence in leadership can influence consumer sentiment, brand trust and policy expectations — all of which may affect company performance, sector sentiment and longer-term investment considerations.