As the stock markets seemed to find a bottom last week and may move laterally rather than down for a while, consumers are pledging to limit spending — not just for next year or the year after — but for five years. The planned limits on spending vary by category according to a new survey released by BigResearch:
- Price conscious when buying food and clothes 50.7%
- Reduce spending on dining out 46.3%
- Reduce entertainment spending 39.2%
This trend was backed up by a recent Wall Street Journal article that highlighted the 5% drop in 2008 retail toy sales in the U.S. In particular, the article discussed how parents have shunned Hasbro's $300 toy robot, Kota, in favor of its less expensive Hatchling. Parents may not be saying no to all toys but they're certainly saying no to items that seem extravagant.
The BigResearch survey also supports the concept of a new shopper psyche which recently surfaced in a Time magazine report. (See my blog earlier this month on the topic.) While the Time report encourages retailers to improve their shopping environments and reduce prices, the BigResearch survey provides specific ammunition your clients can use to connect with unique demographic groups that are still opening their wallets. Remind your clients of these positive aspects of the new shopping attitude:
- 90.7% of adults report they plan to cut back on spending but that number drops to 83.1% for households who have an income exceeding $150,000.
- 39.2 % of adults report they plan to cut back on entertainment spending which means that 60.8% plan to spend the same or more.