Bigresearch: Consumers less confident, but also less practical in spending
August 27, 2010,
Columbus, Ohio - Consumer confidence in August flat lined at 27.8% as two in five consumers surveyed by BigResearch said they are worse off financially than a year ago, but fewer shoppers are feeling "practical," sparking some hope for a better back-to-school season.
Bigresearch's most recent monthly Consumer Intentions & Actions (CIA) Survey was fielded between Aug. 3 and 10.
"While confidence and the U.S. unemployment rate - remaining at 9.5% - both failed to improve over the past 30 days, consumers are feeling a bit brighter about outlook for the job market," Bigresearch reported, as fewer than one in three people surveyed, or 28.9%, said they expected there will be "more" layoffs over the next six months, down two points from July's 30.8%.
More than half (53.1%) said they feel layoff levels will remain the same, up slightly from 52.2% last month, while about one in five (18.0%) hope for fewer, rising a point from a month ago (17.0%). Those concerned with becoming laid off remains stable at 3.9%, the same figure posted in June and July 2010.
The current reading "remains quite an improvement over August 2009" at 7.8%, Bigresearch said.
Giving retailers more to be concerned about is the finding that 40.6% of surveyed consumers said they feel "worse off" financially compared to a year ago - "and let's face it, 2009 wasn't a great year," Bigresearch noted. Just over one in 10 said they are better off, while 45.2% said they are the same financially.
Still, students headed back to school may have an easier time this year convincing their "penny-pinching parents that they need a new netbook, e-reader, or mobile device." More than half, or 53.5%, still said they are focused on necessities when shopping, but this percentage has lowered from last month's 58.0% and August 2009's 55.9%.
Home Depot at 29.8% and Lowe's with 26.2% as preferred shopping desitinations "continue to hammer the competition" in the home improvement category. Walmart ranked third place, with 6.1% of consumers shopping there most often, while Menards garnered 4.1% and ACE Hardware 2.9%.
As it relates to spending, a lesser focus on practicality and needs over wants "appears to be having a positive impact," Bigresearch found, on the 90-day outlook compared to July's results. This outlook is also an improvement over August 2009 and August 2008 versus the pre-recession August 2007 rates.
By retail merchandise category, home improvement, home décor and home furniture were all up in July 2010. The only home-related business that was reported as down for the period was lawn & garden.
More good news is that consumers' six-month purchase intentions continue to track ahead of August 2009 levels for big-ticket items, which in the home category comprises furniture.