SYDNEY: Consumer confidence levels are continuing to decline in Australia, leading a majority of shoppers to save more and purchase cheaper grocery products.

Nielsen, the research firm, reported its regular barometer of popular sentiment in the country stood at 110 points in Q1, measured against 112 points the previous quarter and slightly off from 111 points year on year.

The overall decrease marked the third successive quarterly contraction, and comes despite the fact 67% of the panel proved optimistic regarding job prospects for the coming 12 months.

Elsewhere, 51% of interviewees were putting any spare funds into savings after meeting essential living costs, a seven percentage point lift compared with the closing quarter of last year.

However, 39% are investing in holidays, not least because of the relative resilience displayed by the Australian dollar.

More widespread behaviours at present include reining in spend on gas and electricity, cited by 68% of the sample, and cutting back on new apparel, reaching 64%, up five points from Q4 2010.

Eating fewer takeaway meals registered 58%, trimming expenditure on out-of-home entertainment logged 56%, and switching to lower-priced grocery brands yielded 55%.

"It's no surprise that consumers are increasingly concerned about their household budgets in response to such fluctuating economic conditions," said Chris Percy, Nielsen consumer group's Pacific managing director.

"The cost-saving strategies currently being employed by consumers are likely to continue well into the year."

The main matter worrying Australians was rising utility bills, listed as a top two issue by 37%, and a long-term source of anxiety.

Surging fuel prices hit 21% on this metric, with similar inflation linked to food securing 20%.

Data sourced from Nielsen; additional content by Warc staff