New September Insights in a Snap!

This month, we’ve introduced the Consumer Snapshot – a concise look at a few trending topics for the month of September, designed to give you a BIG picture view of current consumers.

In this month’s video analysis, we’re examining consumer confidence, practical spending and personal finances, and the pain at the pump. And, we wrap things up with a peek at Holiday 2012 spending plans.

This month’s video is below, but you can also click over to our full version for a short text summary as well as the link to this month’s complimentary PowerPoint analysis.

 

Interested in becoming a BIG VIP? Please click here to sign up for access to a host of complimentary insights, from our briefings and webinars to press releases and more.

To view the latest BIG Consumer Snapshot in its entirely: September 2012.

Source: BIGinsight.com

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp

Pain at the Pump: Gas Price Impact Update

After learning about how gas price expectations impact behavior, what changes consumers are making as a result, and who they believe is in control, I thought we could take it back to basics this month and dig into where the impact stands today. We know that confidence is up slightly this month but not looking stellar compared to previous years, and the economy continues to play a big role in back-to-school spending plans.  Are pump prices still a pain or are they becoming a slightly more manageable ache? We turn to the Consumer Vital Signs InsightCenter™ to get our answer.

For the third consecutive month, the average gas price* in the U.S. has declined, dropping from $4/gallon in April to $3.42 in July. After hearing about $5/gallon forecasts, $3.42 doesn’t seem so bad. Following suit, the percentage of consumers being impacted by gas prices has declined from 76.3% in April to 71.5% in July, nearly 15 points lower than the 86.0% of Adults 18+ who were being impacted in June of ’08 when the price per gallon was $4.03.

*The average gas price is for the first week of each month to correspond with when the survey is being conducted.

This still means, though, that the majority of consumers are being impacted by fluctuating gas prices and changing their spending habits as a result. After paying $3.25/gallon last week and feeling like I was getting a deal, I quickly came to realize that notion was absurd; $3.25 per gallon is still a lot of money when you remember a day when prices were less than $1/gallon. It seems the majority tends to agree.

While driving less often continues to be the most popular (and logical) habit to conserve fuel, this is down from last year (45.8% in Jul-11 to 41.0% in Jul-12). Reducing dining out, decreasing vacation, spending less on clothing, delaying major purchases, and spending less on groceries are also all down from last year among Adults 18+. Carpooling, however, has seen a very small increase from 7.6% in Jul-11 to 8.3% in Jul-12.

So, is consumers’ pain at the pump excruciating or just a slight annoyance? With the large majority of consumers still being impacted by fluctuating gas prices, it does still seem to cause them a bit of pain. However, Anxiety at the Pump may be a more appropriate name for this ongoing blog. After feeling the pinch of $4/gallon in the midst of the Great Recession, there is always the fear that those prices will become part of the New Normal in the uncertain world we now live in. We may never go back to the days of not being conscious of how much gas we’re using.

To keep updated on fluctuating gas prices and other ways consumers are being impacted, register for the Consumer Vital Signs InsightCenter.

Source: BIGinsight™ Monthly Consumer Survey – JUL-12 (N = 8509, 7/2 – 7/9/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Pain at the Pump: Who (or What) is Controlling Pump Prices?

In an election year, gas prices are more than just a concern for consumers. They become a hot topic in debates and fodder for those political ads we all love so much. Consumers’ pain at the pump can quickly turn into a reason for voting (or not voting) for a particular candidate.

In our May American Pulse survey, we asked respondents who or what they believe controls gas prices, and the American people were most likely to indicate that most control is held overseas. Nearly half of Adults 18+ believe that leaders in the Middle East are in control, followed by 44.3% who say that good ol’ supply and demand holds the power, while “International Conflicts” come in third. Under one in four say that Congress (24.4%) or the President (23.1%) are responsible for pump prices.

When breaking this down by generation, the youthful are more likely to spread the power out. While supply and demand tops their list, they are the least likely to say this basic economic principle controls gas prices. They are also the least likely to believe leaders in the Middle East are in control, but more likely than older generations to say the President and Congress are holding the reigns.

When we asked these questions in May, consumers had expected gas prices to be $3.95 per gallon by Memorial Day weekend, only to be pleasantly surprised when they were only at $3.67 per gallon (EIA.gov). With gas prices below expectations and continuing to decline (not to mention those $5/gallon summer forecasts we were hearing about heading into the Spring seemingly by the wayside), we decided to ask consumers in our June American Pulse survey who they believed was responsible for the drop in the average price per gallon, using the same list of available answers. In other words, we know who they think controls them, but who do they give credit to when things are going well?

For Adults 18+, supply and demand tops the list of responsible parties when it comes to prices declining, followed by consumers themselves (the “demand” side of that S+D equation).

As they did with the control, Gen Y was most likely to spread out the credit. Older generations were more likely to focus on supply and demand and consumers. 20.9% of Gen Y indicated that the President was responsible, compared to just 12.6% of Gen X, 6.2% of Boomers, and 4.5% of the Silent Generation. Congress followed the same trend with Gen Y being the most likely to indicate they were responsible for the drop in prices.

So, let’s bring this all back to the election. Will gas prices have a direct impact on who consumers vote for in the November?

If consumers are feeling the pinch (or even anticipating it) because of the dollars draining from their wallets when they fill up their tank, it seems the faces of the incumbents in the Oval Office and at the State House will be flashing in their minds along with the dollar signs. Steep gas prices could be an advantage for those looking to steal a seat in Congress or make Pennsylvania Avenue their new address. On the flip side, with consumers not giving a whole lot of credit to politicians currently holding office, a slight drop in gasoline prices alone probably won’t be the tipping point for incumbents to hold onto their seats.  Either way, Gen Y is most likely to equate pump prices with political offices.

Source: American Pulse™ Survey, May & June 2012, Jun-12 N = 3603

© 2012, Prosper®

June Insights – Hot Off the Press!

Early each month, we release our Executive Briefing – complimentary topline insights from our latest Monthly Consumer Survey of more than 8,000 consumers.

Click to view this month’s Executive Briefing

And, we’ve just released our latest edition for June. Here’s what you may have missed:

– As the summer weather heats up, confidence in the economy cools off. This month, just 31.3% feels very confident/confident in chances for a strong economy, down from last month and marking the second consecutive month of decline for this indicator.
– Good luck, Class of 2012: With the official U.S. unemployment remaining a discouraging 8.2%, an increasing number of consumers foresee a rise in layoffs over the next six months compared to May.
– May’s dip in practicality appears to have been just a “blip” on consumers’ spending radar. Additionally, practicality remains elevated from the June readings we recorded during the recession, suggesting that fault lines in the macro-economy are still rattling spending plans on a micro level.
– Pain at the Pump: No gas price “fireworks” expected to set off for upcoming the holiday. Drivers are anticipating an average pump price of $3.75/gal by the end of June, 20 cents lower than their prediction for the close of May.
– Walmart wins in Women’s Clothing, while JC Penney is slipping.
– Consumer Migration: While Walmart’s travails are well-documented in Women’s Clothing, does the big discounter’s outlook look any brighter over in Men’s section?
– 90 Day Outlook is looking UPward compared to the past two years.  However, with spending for the majority of merchandise categories weakening compared to May, look for practical consumers to continue to exercise caution when spending.
– What’s Hot? Saving is in style, with Coupons taking the top spot in our list of What’s Hot for June. [#attentionJCP]

To sign up to receive the monthly BIGinsight™ Executive Briefing, please click here.

And, to view the latest BIG Executive Briefing in its entirely: June 2012.

Source: BIGinsight™ Monthly Consumer Survey – JUN-12 (N = 8760, 6/5 – 6/12/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Pain at the Pump: Great Expectations

Earlier this month, the Energy Information Administration (EIA) significantly downgraded the forecast for summer (April through September) pump prices by 16 cents per gallon to $3.79. With the EIA changing their expectations for the summer, are consumers doing the same? Will the pain at the pump impact Memorial Day? And how do gas price expectations impact consumer behavior?

Let’s start with the upcoming holiday weekend. Less than half (43.3%) of Adults 18+ indicated that increased gas prices will impact their spending for Memorial Day, down more than 10 points from last year (53.7%) when gas prices were more than 30 cents higher on average. This is on par with May of 2007 (43.2%) when gas prices were $3.10 on average and below May of 2008 (56.4%) when prices were $3.66 per gallon. What a difference a few years can make; $3.10 per gallon would feel like a clearance sale at this point.

Note: The EIA gas price data is from the first week of each month which corresponds with the timing of the survey collection.

What do consumers expect prices to be by the time the holiday weekend has passed? On average, Adults 18+ anticipate that prices will be $3.95 by the end of May. Consumers have lowered their expectations after an increase in April ($4.17). While this is still above the $3.79 average expectation the EIA recently released, it’s important to note that they announced their new forecast on May 8, 2012, the same day we completed fielding the Monthly Survey. Stay tuned for June to find out if consumer expectations continue to lower and if these decreasing pump price forecasts help boost their confidence in the economy after it fizzled in May.

Why all this talk about expectations for gas prices? Do they really matter? In the April BIG Call, we learned that the answer is yes. When gas prices exceed consumer expectations, they make changes quickly. The chart below shows the percentage of consumers who said they are driving less because of gas prices compared to actual gas prices. From February to March of 2012, we see a more than ten point jump in those who are thinking twice before putting their foot on the gas pedal. While there was a 30 cent upswing in the average gas price during this time, the percentage who were driving less remained flat from March to April when prices increased 15 cents per gallon. Wouldn’t we expect to see some sort of increase in consumers driving less often in April if the 30 cent upswing in March had such a dramatic effect?

After taking a closer look, we came across a BIG insight. The differentiating factor from February to March is that gas prices exceeded consumer expectations. In February, consumers had only expected gas prices to be $3.69 per gallon by the end of the month. By the first week of March, they were at $3.85 per gallon. So, the consumer expectation was below the actual gas price. In March, consumers had an expectation of $4.08 per gallon by the end of the month and prices were only $4 per gallon by the first week of April. The expectation was higher than the actual price.

 *The actual gas price data is from the first week of the following month.

To keep a pulse on how gas prices and other economic issues are impacting consumers, sign up for the Consumer Vital Signs InsightCenter™.

Source: BIGinsight™ Monthly Consumer Survey – MAY-12 (N = 8789, 5/2 – 5/8/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Decreasing Spending Echoes Katrina Era + Pain at the Pump

This month, my co-host for the BIG Call was Stacie Severs, Client Services Manager for BIGinsight and author of our Pain at the Pump blog series.

For the first half of the call, I presented new insight from our April Monthly Consumer survey, which included:
– Consumer Confidence, which stalled in April
– The “More of the Same” outlook for Unemployment
– The rising Focus on Needs, which is in range of recession-era Apr-09 and Apr-10
– The spike in plans to Decrease Overall Spending
– A BIG Forward Look at 90 day spending plans

For the second half of the Call, Stacie presented NEW findings on the impact of gas prices from our American Pulse survey. Here’s a preview:
– Nearly a third of consumers are filling up as soon as they see the price per gallon drop – regardless of whether or not they need it
– Two in five are shopping for apparel less frequently to help budget for the increasing cost of gas
– 20% are using their smartphones to research pump prices

To listen to the recorded webinar, click here.

For more information on this data, please contact BIGinsight™.

Source: BIGinsight™ Monthly Consumer Survey – APR-12 (N = 8724, 4/3 – 4/10/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Pain at the Pump: Running on Empty

I have always heard that you shouldn’t let your gas tank run too low on a regular basis because it’s bad for your car (mostly from my dad). In my 10+ years of driving experience, I have let my gas light come on one time and it was in the last month (yes, dad, I listen to you sometimes). When gas is nearing $4/gallon, I’m just less inclined to pull into a station and fill up. I’d rather figure out how many miles I can drive before it is necessary. I’m also one to gamble – filling up when I see prices drop betting that they won’t be any lower when I really need gas.

In this month’s American Pulse survey, we asked consumers what changes they are making regarding their fill-up habits as a result of fluctuating gas prices. More than one-third are filling up less often by letting their tank run close to Empty, just under three in ten are filling up as soon as they see prices drop, and just under one quarter are filling up more often so that the cost isn’t as high each time they go to the pump. When breaking this down by generation, Gen Y-ers are more likely to make changes in general, while this youthful bunch and Gen X are likely the people you will see stranded on the side of the road because they let their tanks get a little too close to empty.

If they don’t run out of gas before they get there, consumers are making many different changes when shopping for groceries. Using coupons more often and purchasing only needed products are at the top of the list for Adults 18+. Boomers are the most likely generation to coupon, stay away from impulse purchases, and buy more store brand and generic. Gen Y and Gen X are the most likely to switch to a different brand because they are cheaper or on sale (hint to CPGers: here’s your chance to steal some share). Gen Y shoppers are much less likely to make a list and stick to it, providing room for some in-store promotion to influence their purchases.

When it comes to clothing, shoes, and accessories, two in five Adults 18+ are only buying sale items because of gas prices. Gen X-ers are least likely to peruse the sale racks while Gen Y-ers are the most likely group to be shopping at discount stores more often and, not surprisingly, shopping at malls less often. More than three in ten Boomers are making clothing, shoes, and accessories a smaller part of their budget.

While gas prices have been flirting with the $4/gallon average, I have yet to see the amount of walkers and stranded cars that were abundant when we first saw that mark in the summer of ’08. I keep thinking of the scene from Forrest Gump where he runs across the country with Jackson Browne’s “Running on Empty” playing in the background. It might not be a bad idea for all of us find some good running shoes (on sale, of course) and hit the pavement.

Source: American Pulse™ Survey, APR-12 #1, N = 3738

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development.

Why Are Shoppers So Glum About Spending?

As we recently reported in our April BIG Executive Briefing, two in five consumers (39.8%) say they plan to decrease overall spending over the next three months…that was April’s top financial priority, dethroning the usual intent to pay down debt (34.7% in Apr-12).

Forty percent actively attempting to curtail their expenditures is a big number. So big, in fact, that we’ve only approached this figure three times in the past SEVEN years. Researching this a bit further, it was pretty easy to tie a piece of history to each of the three previous peaks: Hurricane Katrina, the Summer ’08 Record High Gas Prices, and Holiday ’08 (see chart below, but don’t strain your brain…I’ll break it down in a second). Because two of these three events had at least a little something to do with pump prices, I added in the average price per gallon of gas during the week of our survey collection, as reported by the U.S. Energy Information Administration.

Now, let’s break this down historically:

Hurricane Katrina: When this natural disaster slammed into the Gulf states in Aug-05, we were all affected nationwide. New Orleans, et al were literally adrift, slow response times left victims with prolonged suffering [*coughs* FEMA], and price per gallon of gas soared to $3 [ah, $3/gal…how I miss thee]. By September, consumers were responding with their spending sentiment: 40.0% were planning to decrease overall expenditures. As you can see in the chart though, as pump prices edged back downward, consumers backed off this conservative fiscal mantra.

Summer ’08 Gas Price Highs: According to the AAA Daily Fuel Gauge Report, pump prices hit an all-time high on July 17, 2008, at $4.114/gal. By now we were also in the belly of the recession, and 39.2% of consumers reacted with plans for spending cutbacks. And though gas prices bottomed-out by Holiday 2008, consumer spending plans didn’t respond in kind #thankyoubankfailures

Holiday ’08: It’s safe to say that the Holiday 2008 shopping season was a disaster. The severe spending cutbacks that materialized with shoppers were not anticipated by retailers, who were left deeply discounting the massive amounts left on their store shelves pre- and post-holiday. More than two in five consumers (42.9%) rang in New Year 2009 with resolutions to decrease overall spending, a record high. So – obviously – it’s not always gas prices that ignite spending cutbacks among consumers…sometimes, you can blame it on a recession.

Furthering the point that pump prices aren’t always that culprit, when the cost of fueling up topped off at over $4/gal last May, drivers didn’t have a fiscal knee-jerk reaction. While at the time consumers were bracing for a $4.25/gal price by Memorial Day ’11, that never materialized and plans to decrease overall spending continued to fluctuate in a relatively [new] “normal” 30% to 35% range.

So what’s different this year? Average gas prices have crossed that $4/gal threshold again, and 39.8% have responded with plans to cut back. Have consumers just had enough? Are they tired of dealing with pump prices in addition to the inflating price tags on apparel, food, and other household items? Are they not willing to tap into their hard-earned savings to cover the additional costs of fueling up? Are they hedging on a response [or lack thereof] from Capitol Hill?

At any rate I think it’s safe to say that if gas prices don’t cool off as summer heats up, retailers might be in for a spending drought.

For more information on this data, please contact BIGinsight™.

Like the timeline infused with BIG data? Be sure to sign up for complimentary access to our Vital Signs InsightCenter™, an advanced platform for the visualization and delivery of insights and answers on how consumers in the U.S. are reacting to key economic events. It illustrates how consumers feel about the economy, changes they make in their lives in reaction to the economic situation, and how their personal financial and spending plans are affected by key events. It goes beyond traditional point-in-time data reports to trended insights in one easy-to-use, decision-ready format.

Source: BIGinsight™ Monthly Consumer Survey – APR-12 (N = 8724, 4/3 – 4/10/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

“Save-not-Squander” + More on The Changing American Consumer

I co-hosted the March BIG Call with a very special guest, Dr. Marianne Bickle, Chair and Director for the Center for Retailing, University of South Carolina. Armed with BIGinsight™ data, Marianne authored the new book, The Changing American Consumer (more on that in a second).

For the first half of the call, I presented new insight from our March Monthly Consumer Survey, which included:
– A rise in Consumer Confidence for the fifth consecutive month
– Fizzling spending with Practicality, Focus on Needs heating up
– The “Save-not-Squander” financial mantra
– The Pain at the Pump predicament
– A BIG Forward Look at 90 day spending plans

For the second half of the Call, Marianne presented NEW findings on the Fast Food industry (which has been a hot topic lately…see also here, here, and here). Using our BIG data, Marianne analyzed consumer trends in Fast Food – by income, census region, and gender – and brought everything full circle with a discussion on The Changing American Consumer.

To listen to the recorded webinar, click here.

 

For more information on this data, please contact BIGinsight™.

Source: BIGinsight™ Monthly Consumer Survey – MAR-12 (N = 9242, 3/6 – 3/13/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Pain at the Pump: Are $4/Gallon Fuel Prices Becoming Part of the New Normal?

During the last week in Columbus, OH, it’s been 80 degrees and sunny on consecutive days, the state of Ohio was represented by four teams in the Sweet Sixteen (including my beloved Buckeyes), and gas prices hit $3.99. Which of these does not belong in the realm of positivity? Well, if you have no interest in Ohio basketball (or basketball in general), I guess you could go with the history-making Ohio representation in the March Madness tournament. And I’m sure if you live in Seattle you could care less what the weather is like in the Ohio capital.

But I think I’ll stick with the gas prices.

Even though we saw it coming, the gas price increase is not welcome. It’s hard to imagine that I’ll ever get used to $4/gallon and, according to our most recent American Pulse™ survey, I’m not alone. 73.7% of Adults 18+ somewhat or strongly disagree with the statement, “I have become used to high gas prices and paying more than $4/gallon would not impact by spending in other areas.”

At $4/gallon, it seems that gas prices are making an impact regardless of income level. Just under three in four (74.7%) of those with a household income level below $50K somewhat or strongly disagree, compared to slightly less (72.7%) of those with income levels $50K and up.

When asked how they expect prices to change over the next 6 months, the majority (87.3%) of Adults 18+ feel that gasoline will be somewhat or significantly more, compared to 76.9% who feel the same way about food prices and 62.7% who think clothing prices will be higher when Fall makes its arrival.

Some consumers, though, are trying to see the glass tank half full when it comes to gas prices. Slightly more than two in five (40.5%) Adults 18+ somewhat or strongly agree with the statement, “Higher gas prices will lead to more alternative energy sources in the long run.” Another point of optimism? Despite higher gas prices, people are planning to spend an average of $145.28 on Easter this year, up from $131.04 last year according to our latest research for the National Retail Federation.

In this post-recession economy, we hear the phrase “New Normal” tossed around a lot, meaning that consumers have adjusted to new spending habits and will not return to their pre-recession ways. While gas prices are also causing us to adjust those spending habits, it seems that most of us are not ready to accept $4/gallon as anything close to normal.

For more information on this data, please contact BIGinsight™.

Source: American Pulse™ Survey, MAR-12 #1, N = 3892

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.