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November Consumer Spending Indicator Shows Consumers in
No Rush to Spend
With the distraction of the Presidential election behind us and the holiday season upon us, will consumers rebound? The November results of NPD’s Consumer Spending Indicator suggest consumers are not ready to head back to the stores – at least not yet.
The percentage of consumers who believe the economy is in a downturn increased again last month. In April, 84 percent of respondents said they felt the economy was either in or headed for a recession. In November that number increased to 91 percent. “Off-hand, that seven percent increase may not sound like a lot,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc., “but when you turn the spending faucet of 14 million people off, that seven percent from April to November represents trillions of dollars.”
Are consumers motivated by all the sales retailers held during the preceding month? The number of consumers who say they would take advantage of sales or coupons has remained relatively steady since July. “So those huge sales that were designed to lure the customer in really don’t seem to have had much of an impact. They aren’t bringing the consumers back in to shop,” said Cohen.
| Which of the following money-saving promotional events and/or programs, if any, do you think you are more likely to take advantage of either now or in the coming months? | ||
| July | November | |
| No Difference | 34% | 35% |
| Sales | 28% | 29% |
| Coupons | 28% | 28% |
| Source: The NPD Group/Consumer Spending Indicator | ||
The same categories that were the least vulnerable in last month’s study remain so in the latest study, with one slight change. Video games and toys remained steady, while beauty was edged out of the number-three spot.
Video games took the top spot as the least likely to see cutbacks in consumer spending with 32 percent, followed by toys at 36 percent. This month, however, movies took the number-three spot with 39 percent. Beauty slipped to fourth this month, at 41 percent. “But beauty is still showing that women remain loyal to their regimen even in tough times,” noted Cohen.
Where do consumers say they will cut back? Most told NPD their cutting back will be on dining out. Fifty-seven percent of respondents said they are looking to spend less there. That was followed by cuts in spending on apparel. In the November Consumer Spending Indicator survey, 52 percent of respondents said they would cut back on apparel spending. Consumers have shown a continual decline in their desire to spend on apparel, with a seven point decline since April. Furniture was in the number-three spot in November, with 49 percent stating they plan to spend less.
As previously noted, an important measure of how consumers are faring is how secure they feel about their jobs. Here, there is a sign of caution. In July, 25 percent of respondents said they were not concerned about their jobs; in November, only 19 percent said they are not concerned. “This is a number I watch very closely,” Cohen said. “I think it is the best indication of consumer behavior and now, what with the stock market, the political market, the media market, and the job market, we are seeing an all time low here.”
Methodology: The NPD Group fielded this study using Fast Checks, NPD’s quick, flexible, and budget-conscious online custom surveys. The survey was fielded to a nationally-representative sample of 2,000 men and women ages 18 and older. The data has been weighted. The data presented in this report was collected from approximately 800 total respondents. The November survey was fielded November 6 to November 13, 2008.
Learn more about NPD’s Fast Checks and ask us about the new Economy Tracker. contact Charles Camaroto at 866-444-1411 (+1-516-625-2311 outside the U.S.), or email contactnpd@npd.com.