Consumer Intentions & Actions: April (Part 1)
This month, I will be reviewing the latest big insights on confidence, practicality, and personal finance, as well as some timely data on how rising gas prices are affecting consumer spending.
Consumer Intentions & Actions: April
- The April Consumer Intentions & Actions survey was collected April 5th through the 12th and includes the thoughts of about 8500 consumers.
- We’ll be taking a look at:
- Consumer Confidence;
- Practical Purchasing, Focus on Needs over Wants, and Budget Plans;
- Financial Plans;
- The Effects of Escalating Pump Prices;
- Finally, we’ll take a BIG Forward Look with 90 day purchase plans;
I always kick off this discussion with Consumer Confidence, a key indicator of consumer’s overall mood and how willing they are to spend. Let’s take a look at this data over two different time periods.
This first chart displays a 13 month snapshot of those who are very confident or confident.
As you can see, we are now in the third consecutive month of decline, with 28.6% who are confident or very confident in the economy.
This current reading is four points below April 2010 sentiment.
Comparing data back to 2004, you can clearly see the toll that the economic downturn has taken on the consumer psyche.
A year ago, it may have appeared that confidence was on an upswing, that maybe this was a turning point for recovery. But now, it seems that any improvement in confidence a year ago was more of a blip on the radar screen.
As I’m sure that you can imagine, consumers who have little faith in our economy aren’t exactly big spenders when it comes to shopping.
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 the dark blue trend line
- In light blue is I focus more on what I NEED rather than what I WANT.
- And then in green is I have become more budget conscious.
As you can see, each of these attributes saw a slight uptick from March, reflecting declining optimism in confidence. Interestingly, this month’s figures are slightly below those from April 2010, when confidence was four points higher than it is now.
How can this be explained? Perhaps it’s that while consumers maintain a gritty view toward the economy, they are willing to “give in” – on occasion – when it comes to spending.
- Maybe it’s that $4 cup of coffee;
- A new outfit purchased on the sale rack;
- Or a Saturday evening out.
- Whatever the guilty pleasure may be, don’t look for consumers to overindulge or revert to pre-recession spending anytime soon. Nearly half of consumers still contend they are spending practically and more so are just focused on the necessities.
Check back later this week when I will continue the Consumer Intentions & Actions discussion. Up next, financial planning, pump prices and a look forward into future purchase plans!