A majority of US consumers
are likely to maintain or increase current spending levels - especially on
basics - in the next 30 days, while young professionals and the affluent will
up their spending in a broader number of discretionary categories, according to results from the newly
introduced American Express Spending and
Saving Tracker (pdf) study.
The survey, which asked
consumers to compare spending priorities now vs. a year ago, revealed that 60%
of overall respondents are willing to spend the same or more in the next 30
days (compared with the past 30 days), while 40% plan to spend less. However,
the general population is increasingly willing to spend more on essentials such
as groceries and car maintenance, while young professionals and the affluent
also put a high priority on non-essentials such as travel and dining out.
Young Professionals, Affluents Open
Wallets Wider
Young professionals are most optimistic about the
current state of the economy and most likely to increase spending during the
next 30 days, with 24% indicating they will do so, writes Retailer Daily.
Those who plan to spend
more intend to increase spending on clothing (65%), dining out (54%) and travel
(53%).Similarly, 14% of the affluent plan to increase spending during the next
30 days, compared with 10% of the general population, Amex said. The affluent
who expect to spend more say their increased spending will be on travel (56%),
dining out (47%) and clothing (43%).
General Population
Focuses Mostly on Needs
Among the general
population, about one-half of consumers who expect to spend more said they are
putting priority on groceries and clothes (49% each).Additional findings:
- Of the general population, 42% named car maintenance as
a high priority this year, compared with 5% last year.
- Interestingly, one luxury expense, salon hairstyling
and grooming (as opposed to a more basic haircut), was a high priority for
46% of the general population this year, compared with 18% last year.
- Among the general population, the greatest number of
consumers said their top priority expenses one year ago were vacations
(25%) and dining out (24%). Today, only 7% named vacations as a high
priority and dining was named as a high priority for only 8%.
- Pet care, sports activities and home cleaning are also
areas consumers said they are putting less spending priority on this year:
- Health and home expenses - such as buying organic food
and home maintenance - are on the rise even as consumers trade down or out
on other items.
Young Professionals
Make Large Purchases
Young professionals are
most willing to make large purchases of more than $500, with 38% saying they
plan a large purchase in the next 30 days, compared with 24% of the affluent
and 15% of the general population.
Young professionals also
plan to spend more on large purchases ($2,460) than the affluent ($2,170), the
study revealed.
Holidays Won't Come
Early
Consumers also appear to be
showing restraint when it comes to early holiday shopping. When asked what
discount level would motivate them to begin their holiday shopping at retail
stores in the next 30 days, the overwhelming majority (69%) say they would not
be motivated by a department store discount. Of that group, 44% feel it is too
early to start holiday shopping, including 52% of affluent and 48% of young
professionals.
From Spenders to
Savers
Mirroring the fact that
When comparing responses of
the affluent with the young professionals:
- 33% of young professionals would put found money toward
their credit card debt, compared with 26% of the affluent.
- More young professionals than affluents would use the
money to go on a shopping spree (16% vs. 6%).
Among the 40% of
respondents who said they would spend less in the next 30 days, the top three
reasons were "trying to save money," "reducing debt," and
that they "have the money but feel now is not the time to spend."
Empathy Breeds
Frugality
When asked what has been
the most significant impact of the economic downturn, the overwhelming majority
of the general population (74%) cited "seeing family and friends affected
by the recession." More people cited this reason than "losing their
job" (30%), "losses in the stock market" (54%), and "losses
in retirement or 401K savings" (56%), said Amex.
Other consumer spending and
expectations indices mirror the findings from Amex's spending tracker. September results from the RBC CASH Index
reveal that consumers remain cautious about spending and pessimistic about
employment. The majority (63%) have themselves, or have had someone in their
inner circle, affected by job loss.
Another private consumer
index, the Deloitte Consumer Spending Index, also gives an optimistic view of
consumer spending trends. The Deloitte Consumer Spending Index rose 23% in August
2009, climbing from 2.39% to 2.94%. This is the highest mark the Index, which
attempts to track consumer cash flow as an indicator of future consumer
spending, has hit since reaching 3.07% in October 2007.
The Conference Board
Consumer Confidence Index increased from 47.4 in July 2009 to 54.1 in
August 2009, driven in large part by the performance of the Expectations Index,
which measures consumer expectations for the next six months. The Expectations
Index rose from 63.4 in July to 73.5 in August, with more consumers taking a
positive view of short-term business conditions and employment prospects.
However, some recent data
released by the federal government is less rosy in its outlook on consumer
spending. According to the Bureau of Economic Analysis,
Recent consumer credit and
borrowing figures indicate that consumers are having a harder time obtaining
lines of credit to finance purchases. Total
About the index: The American Express Spending &
Saving Tracker research was completed online among a random sample of consumers
aged 18 and older. The research sample of 2,032 adults surveyed the general
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