BigResearch finds high-income shoppers still hesitant
Jennifer Negley -- Home Textiles Today, June 28, 2010
Columbus, Ohio - Despite a more comfortable financial position, upper income consumers are feeling the effects of the sluggish economy like their more modest-income counterparts.
That is what consumer research firm BigResearch found in its June Consumer Intentions and Actions (CIA) Survey. Although confidence among consumers with an annual household income of $100,000 or more (35.3%) is higher than adults 18 and older (30.2%), levels for both segments remain flat since June 2009, when the rate was 34.5% versus 30.2%, respectively, "a point that appears to be reflected in purchase intentions," BigResearch noted.
A higher percentage of $100,000-plus household income consumers plan to make big dollar purchases compared to adults 18 and older, but overall percentages for both segments remain relatively flat from June 2009.
Year-over-year, planned purchases are flat for car/truck and home improvement/repair among the $100,000-plus set, after having increased for a short time as a result of stimulus packages.
However, BigResearch added, "there seems to be a glimmer of hope" for the electronics category, as more high-income consumers are planning to buy computers and TVs, representing a slight up-tick from last year but down slightly from pre-recession levels in June 2007.
With the expiration of the home buyer tax credit, tight lending standards and overall high unemployment rates, the housing market is also slow to rebound. Purchase intentions for homes among high-income consumers is up slightly - by 4.0% - from June 2009, when it was 3.1%, while 3.4% of adults 18 and older said they plan to buy a home (versus 3.3% a year ago).
Reluctance to spend is further shown by the percentage of consumers keeping an eye on their budget: 33.9% of $100,000-plus income consumers have become more budget conscious in the last six months, compared to 40.7% of adults 18 and older.
Almost half, or 44.5%, of upper-income consumers say they are focusing more on needs over wants, compared to 53.8% of adults 18 and older.
"While fewer upper income consumers are tightening their purse strings compared to consumers overall, it is evident that the current economic state is impacting consumers at all income levels," BigResearch said.
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