Price hikes at the pump to make shoppers more practical about spending this summer
May 13, 2011,
Columbus, Ohio - Practicality in spending took a four-point dip among consumers as their focus on needs over wants also declined in May, but higher gas prices have them considering ways to save money going forward, said BigResearch.
As summer approaches, consumers are expecting rising costs on their necessities to impact their spending more aggressively. Focusing on just the fuel, 80.3% said their spending has already been affected by rising prices at the pump, increasing from 67.7% one year ago. The majority of these consumers - 51.7% - said they will drive less to offset growing costs, while two in five (41.3%) will put the brakes on dining out. Other popular cost-savings measures include decreasing vacation/travel (38.0%), spending less on clothing (35.2%), and delaying a major purchase (27.1%).
In this month's survey, 44.8% of respondents indicated they've become more practical/realistic in their purchasing, representing a four-point decline from April's 48.8%. The May reading, however, is still trending upward compared to May 2010's 42.9%.
Bigresearch also said the shoppers it surveyed "might need their vision checked -- their eagle-eyes for just the necessities have gone out of focus in May."
Similar to recent findings related to practicality, surveyed shoppers prioritizing needs over wants declined to 54.9% from 57.9% last month. "Don't expect consumers to get too impulsive, though...this month's reading is still elevated from a year ago (51.5%)."
Other May findings: curtailing spending at 30.7% has taken a back seat to paying down debt at 31.2%, though both intentions have declined from 30 days ago (35.8% and 31.9%, respectively); one-quarter (25.6%) plan to increase savings, also down from April (28.3%); and one in five (19.8%) plan to pay with cash more often.
Looking at trends at retail by product category, sales of linens/bedding/draperies and home décor were both up in April, according to the Bigresearch Diffusion Index.