DISCRETIONARY SPENDING BY CONSUMERS AT LOWEST LEVEL IN 30 YEARS: NEW SURVEY
Charleston, SC, May 7, 2009.... Slight upticks in consumer spending in the month of April were limited to a very few retailers and were "totally replacement driven." These were the major findings of the latest America's Research Group (ARG)/UBS Consumer Mind Reader(tm) Survey released today.
The new survey uncovered "no discretionary spending going on in America," according to consumer trend expert C. Britt Beemer, CEO and Founder of ARG. "People are not even thinking about buying things," says Beemer. "This is the first time in 30 years of consumer surveys that we've seen this low interest in shopping," he adds.
The principal reason for low discretionary spending is that 48.5% of consumers feel pressure from credit card bills.
The startling change in consumer behavior also has a philosophical basis, says Beemer. The survey found that over two thirds of people (66.9%) feel that deficit spending in Washington will cause their children to have fewer opportunities and higher taxes.
As a result of these two important factors, only 29.9% of consumers say they will buy more in May due to feeling better about either their job or the economy.
Over a third of consumers (36.2%) cut back due to back bills and debts, while 7.7% are spending less due to gas and heating costs. Over a quarter of consumers (26.7%) say they buy only on sale at 50% off.
As a result of the need to replace non-working household appliances, national department stores, appliance/electronic stores and home improvement stores saw slight increases in shopping levels.
Furniture stores had a very slight increase due to replacing worn out furniture items.
Discount apparel stores saw women wanting bigger deals and big savings.
The worst hit retailers were mall-based apparel stores, mall-based home accessory stores and jewelry stores that experienced 50% drops in shopping levels, signifying their low rank on consumers' priority lists.
Garage sales and flea markets saw increases in shopping levels as creative shoppers found bargains they are seeking.
The ARG/UBS 2009 Consumer Mind Reader(tm) Survey consisted of 1,000 telephone interviews conducted Friday, Saturday and Sunday, May 1 - 3, 2009, at ARG headquarters in Charleston, SC. The error factor is plus or minus 3.8%.
America's Research Group is one of the nation's foremost consumer research and strategic marketing firms. CEO Britt Beemer is a key resource and advisor to leading brands and top retailers. He is author of The Customer Rules, a new book published by McGraw-Hill.
UBS Global Equity Research provides the broad global perspective and in-depth analysis that institutional investors need to make good investment decisions. With more than 600 analysts, associates, strategists and economists in EMEA, APAC and the Americas, UBS covers approximately 85% of the world market capitalization - over 3,300 companies worldwide across 46 different markets. In addition to UBS's disciplined fundamental research, clients also rely on UBS for corporate and expert access to give them the insight they need, when they need it.
Barbara Burns (212) 486-1140