Consumer Intentions & Actions: April (Part 2)

It’s time for more insights from April! Let’s look into consumers’ future financial plans, the effects of rising gas prices and the outlook for several retail categories compared to previous years.

FINANCIAL PLANNING

The flip side of the spending coin is saving. So let’s take a look at Financial Plans. Here’s another question we’ve been tracking each month for many years: Which of the following financial steps are you planning to take in the next 3 months?

The plans I have displayed on this chart are:

• Decrease Overall Spending
• Pay Down Debt
• Increase Savings
• Pay with Cash More Often

 

Nine times out of ten, paying down debt is prioritized above decreasing spending, but, as you can see from the chart, that’s not the case in April.

• As drivers increasingly pay to fill up their autos, it seems that they are looking to shore up other areas of spending to balance fuel expenses. Rising food and clothing prices also factor into the spending equation.
• So that $4 cup of coffee I was just talking about might get axed in the budget if prices rise to the $4 or $5 per gallon range this summer.

Paying down debt is still very much a priority, though fewer are planning to do so compared to a year ago.

Increasing savings is just as important as it was back in April 2010, while a few more consumers seem less inclined to pay only with cash compared to that same time period.

Here are some other interesting statistics really showing what’s on consumers’ minds right now:

• Two out of five consumers say they aren’t saving enough;
• More than 60% say they are eating leftovers more often due to rising food prices;
• And, two in five are making changes to their regular grocery lists to cope with price increases.
  • Some of the most targeted items for this budget “diet” include impulse items in general, snacks, candy, and cookies.

EFFECTS OF ESCALATING PUMP PRICES

I believe I’ve alluded to this several times now, so let’s finally take a look at the effects of escalating pump prices. This chart is an interesting one, as we are viewing the percentage of consumers who say their spending has been impacted by fluctuating gas prices crossed by the average price per gallon of gas at the time our surveys were conducted, according to the Energy Information Administration.

As you can see, the amount of people affected really took off once the price of gas hit $3.50. With pump prices rising again in April, we can see that the number affected rose as well.

Imagine what might happen if we cross into the $4 per gallon range. Nearly 80% already report being affected. Eight in ten consumers anticipate that the price at the pump will continue to rise through the end of April…

90 DAY OUTLOOK: BIG FORWARD LOOK

Now it’s time to move onto the 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 April 2011 results with March, April 2010, and April 09.

As you can see, all merchandise categories are faring poorly compared to last month and last year.

We are seeing improved results for most categories from April 2009, but one would expect improvement from a recession-addled period of time, wouldn’t they?

And seasonal categories like Major Home Improvements and Lawn & Garden are areas of particular concern.

Finally, while I don’t have the pre-recession April 2007 results on this chart, all categories are in fact facing downward from this time period, so we’re still not nearing a spending recovery.

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That wraps up April! If you want more current consumer insights, including voting trends and media usage, be sure to check out http://www.BIGinsight.com. We update it constantly, so that data and insights are always fresh!

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