Let’s find out what’s going on with consumers – are they pinching their pennies? What will they be spending on, if they are spending? How are gas prices affecting shopping behavior?
PRACTICALITY IN PURCHASING
Each month, we ask “In the last 6 months, have you made any of the following changes?” Those “changes” I have displayed within this chart are:
- I have become more practical and realistic in my purchases, which is in dark blue.
- In green is I focus more on what I NEED rather than what I WANT.
This month, 48.5% say they’ve become more pragmatic when shopping, up nearly a point from the previous June high of 47.8% in 2009. And, 55.2% indicate they are focused on what they need rather than what they want while in the store, which is marginally higher than the 55.0% reported back in June 2009. June lows were recorded back in 2005 at 10 points lower than current levels for each of these attributes.
So what does this all mean? Headed into summer, consumers will be more focused than ever on watching their shopping lists, sticking to budgets, and avoiding impulse purchases. Retailers looking to make a sale with these consumers had better make them feel good about spending – give them a reason to do so – or they may face long return lines for regretted purchases.
EFFECTS OF ESCALATING PUMP PRICES
While gas prices have cooled off in the past month, this still remains a hot topic among consumers. For this chart, we are viewing those who say gas prices have impacted their spending – the dark blue bars – and plotted against current gas prices at the time our survey was conducted, according to the Energy Information Administration. These prices are represented by the yellow trend line.
Compared to May, the number of consumers feeling the gas price pinch has backed off a bit, as the price per gallon lowered. The number of consumers impacted, though, is still a very high 78% of the population, so gas prices are still quite newsworthy this month. A year ago, this figure was eleven points lower at 67%.
About 46% anticipate prices will increase by the end of the month, much higher than the 74% who expected this in May. Drivers are also predicting an average pump price of $3.91 per gallon by the close of June.
And while two in five said that Hybrid Automobiles were “hot” in this month’s survey, only about one in ten of those in the market for a new vehicle are considering going green.
OUTLOOK: BIG FORWARD LOOK
Let’s review our BIG Forward Look, which maps out consumer spending plans over the next 90 days. We ask a simple question each month…Over the next 90 days, do you plan on spending more, the same, or less on the following items than you would normally spend at this time of year?
The results are then tabulated into our Diffusion Index (Spend More – Spend Less) and compared to previous periods of time. In the chart displayed on the screen, we are comparing June 2011 results with May as well as June results for the past three years.
Retail Merchandise Categories – 90 Day Outlook
(Jun-11 compared to May-11, Jun-10, Jun-09 and Jun-08)
Things look pretty great, don’t they? I spy decline from May for Lawn & Garden, which is likely seasonal, as the planting and mulching season draws to a close. Also, Dining Out is down from a year ago. That’s likely the practical side of consumers speaking, with home cooked meals and leftovers looking more appetizing to budgets than a meal in a restaurant. But it’s easy to compare this month’s data to results during a recession. Let’s check out how we fared versus June 2007.
Retail Merchandise Categories – 90 Day Outlook
(Jun-11 compared to PRE-RECESSION Jun-07)
Compared to June 2007 figures, all categories remain DOWN, except for Groceries. But, does this really mean that consumers are stocking up on more items in their pantries, switching back to name brands, or opting for better cuts of meat?
Not necessarily. Recall that food prices are on the rise, forcing shoppers to spend more on these necessities and putting the pressure on to remain practical in other areas, such as apparel, dining out, vacations, and other expendables.
With consumers feeling fearful and uncertain about the economy and their financial standing, that gives us all the more reason to tap into their minds each month and really try to decipher how they are reacting today and planning for the future.
…with BIG insights from John Mariotti, President & CEO, The Enterprise Group
The February Consumer Intentions & Actions® Survey is in – over 8,000 consumers participated!
After some New Year euphoria, confidence is down at 31.2% in February. With the unemployment rate at 9.0% and gas prices hovering above $3.00 per gallon, consumers remain cautious and wary about the future. How does this affect their financial plans over the next 3 months? How many U.S. consumers are living paycheck to paycheck? Are they focused on needs now that the holidays are behind them? Find out in this month’s BIG Call.
Click here to see this month’s BIG Call!
February BIG Call Take-Aways:
- Confidence is down in February, consumers are cynical about “recovery” talk.
- Unemployment is a big contributing factor to consumer cynicism. 23.7% believe there will be “more” layoffs in the next 6 months.
- Practicality is up year-over-year, but watch out for “cabin fever spending.”
- Paying down debt is the top financial priority. Find out what the government can learn from consumers.
- Nearly half feel there is “too much month” at the end of their paychecks.
- 90 Day Outlook: While some optimism shines through here, all categories are DOWN from Feb-08.
Plus find out more about John’s “Special Issue” this month – The Decline of “Big Box” Specialty Retailers.