BigResearch: Consumers Still Nervous, But Loosening Up
February 22, 2010,
While shoppers are losing confidence in an economic recovery, those who are shopping are giving more focus to less practical purchases, according the BigResearch’s most recent Consumer Intentions & Actions Survey.
The monthly survey polls more than 8,000 consumers. The most recent was fielded Feb. 2 to 10.
In that time frame, the number of people who said they are very confident/confident in chances for a strong economy dropped to 27.2%, nearly three points lower than last month’s 30.0% rate. That represented the lowest reading recorded since July 2009, when the reading was also 27.2%.
While confidence has improved from a year ago’s 19.4% and February 2008’s 26.2%, the majority (53.2%) was confident back in February 2007.
“Perhaps the goodwill directed toward aiding Haiti is helping alleviate worries about political and national security issues,” BigResearch said, noting that in February one-fifth (21.3%) reported that they continue to be concerned, down from last month’s 24.0% as well as February 2009’s 24.8%.
Retailers “can breathe a short sigh of relief,” the research firm added, now that consumer focus on practicality when purchasing has eased somewhat. Two in five consumers (43.3%) consider themselves practical purchasers, but that figure has dropped from the near majority who asserted the same in January (49.7%) and February 2009 (50.0%). However, it remains heightened from February 2008’s 40.2%.
“Not surprisingly, those focused on needs over wants when spending are also in decline,” BigResearch continued. In February, the majority, or 52.1%, stuck to the necessities, though this reading has fallen eight points from a month ago when it was 60.2% and more than five points from a year ago when it came in at 57.6%.
BigResearch also noted that “interestingly, while practicality and focus on necessities have declined in the past year, when it comes to clothing, consumers remain bent toward buying bargains.” In February, one in four (25.9%) said they only buy clothing on sale, which is up slightly from 25.1% in February 2009, while one in ten (11.5%) contend that sales aren’t important. The majority (62.6%) continues to “usually” shop for specials.
While U.S. unemployment edged downward in January, consumers still appear a wary about jobs, the study also found. This month, 30.6% contend there will be more layoffs over the next six months, just slightly lower than January (31.0%). About half (49.4%) believe layoff levels will remain the same, up from 45.8% last month, while a decreasing number of consumers (20.0%) are optimistically predicting fewer layoffs compared to January’s 23.2%. Those with personal concerns about becoming laid off edged up from January (4.4%) to 5.0%.
Paying down debt remains the priority over the next three months for more than one third of consumers (35.1%), down from 37.9% last month. Those planning to decrease overall spending declined sharply to 30.0% from a month ago’s 37.0%. Increase savings (27.9%) and pay with cash more (21.5%) also weakened from 30 days ago.