With 10% of US citizens now fearing job cuts, and only 25% remaining confident in the economy, there is a greater-than-ever trend toward household cost-cutting, according to the 'Economic & Consumer Insights for Marketing Executives' briefing from BIGresearch.
In the company's consumer survey, 24.7% indicated that they were either confident or very confident in the country's chances of developing a strong economy, rising from a dismal 20.0% in December 2008. However, the recession is taking its toll, as even the optimistic January 2009 figure is almost ten percentage points lower than one year before (33.5%), and is less than half of the January 2007 figure (50.5%).
It appears that this transition - coupled with continued unrest overseas - has heightened consumers' concerns regarding political and national security issues, with 26.7% worrying about these issues (nearly nine percentage points higher than the previous year's 17.9%).
The company offers some sage advice for retailers that are hoping for a recovery following the poor holiday season sales of December 2008: "Become more practical". With holiday bills rolling in and the recession on the minds of consumers in almost every segment of the customer base, 57.3% said they have become more practical and realistic in their spending habits. Focused on the household economy, 53.4% also indicated that they have become more budget-conscious (up from 39.0% one year before). Moreover, two out of three consumers (66.0%) said that, which making purchase decisions, they have become more focused on needs rather than wants.
However, while consumers generally plan to stick to their budgets in 2009, some are still holding firmly to the fashion labels and brands they love, as 46.9% said that familiar fashion labels are still important to them. But with the majority of shoppers (87.0%) indicating that they "usually" or "only" buy clothing that's on sale, these fashion-conscious consumers will most likely shop around for designer labels at discount prices.
Record numbers of consumers are also vowing to fatten their bank accounts. While the general financial priority is paying off debt (44.4%), some 42.9% are now planning to decrease their overall spending. Furthermore, 30.5% of US consumers have vowed to avoid credit, being determined to pay cash more often. One in three consumers (33.5%) said they planned to increase their savings.
Interestingly, only 30% of consumers said that fuel prices in 2009 are having no major impact on their spending compared to the same time in 2008. Among the 70.0% who are affected by the cost of fuel, 48.9% said they are cutting back by making fewer shopping trips, scouting for sales, clipping coupons, and buying store brands.
The full briefing, including retailer-specific figures, has been made available via the BIGresearch web site - click here.