Greek Consumers Cut Alcohol, Fast Food as Austerity Bites

By Justin Rohrlich Over the weekend, Athens newspaper Kathimerini ran a headline reading: “Alcohol and fast food are first to go for Greek consumers.” Quoting a recent study by the Boston Consulting Group, Kathimerini reports 58% of Greeks “are planning to reduce their food budget,” beginning with spirits (70% of respondents), beer (71% of respondents), and fast food (71% of respondents).

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According to BCG, “more Greeks today are spending what little they have left on the absolute essentials, such as dairy and fresh produce, and displaying a consumer behavior pattern that is usually associated with lower-income groups.” However, the shift in personal spending habits could very well enrich the Greek populace in other, non-material ways. The BCG survey found that “the economic crisis has helped Greeks rediscover the joys of entertaining or visiting friends at home rather than going out for a meal or drinks.” Will a coming wholesale shift in Greek dining habits have a material effect on brands such as McDonald's (MCD) and Pizza Hut (YUM)? Will a company like Diageo (DEO) be hurt by a decrease in liquor consumption among Greeks? And what of InBev (BUD) or Molson Coors (TAP)?

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“I do think that the big multinational brands are at risk, since I actually think Greeks will cut back on ‘international' fast food,” says President of Financial Insyghts LLC and Minyanville contributor Peter Atwater. “It's kind of ironic, because foreign countries see these companies as being American, but talk to any American small business owner and they'd tell you that they might as well be from overseas -- ‘they aren't hiring here, they don't pay taxes here…'” Atwater mentions a “migration to intangibles from tangible assets,” which represents an “inwardness that goes right along with social mood.” “Nationalism, protectionism, etc. are all signs of the same migration,” he explains. “But there are good things that can come out of this, too. Learning to borrow things versus buying them; spending time dining in with friends and family.”

(To view Stephanie Taylor Christensen's story on how home add-ons are contributing to market lull, click here.)

Findings by Gallup in the 2008 Healthways Happiness-Stress Index buttress this point, which underscored “the crucial role of spending time with friends and family” in determining one's “daily emotional well-being.”

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