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Posts Tagged ‘personal finance’

Concern Over Government Dysfunction to Dampen Holiday Spending

Thursday, December 5th, 2013

With only 26 days between Thanksgiving and Christmas— six fewer than last year— the retail industry is already up in arms about turning a sufficient profit. But the shortened holiday shopping period isn’t the only factor manufacturers and retailers need to worry about. According to a special IRI survey, 43 percent of consumers plan to rein in their 2013 holiday spending, not because of lack of time, but because of concerns about the debt ceiling crisis and another possible government shutdown. Those who plan to cut back include 53 percent of lower-income households, 52 percent of Hispanics and 47 percent of all households.

Conducted between October 31 and November 5, 2013, IRI’s survey provided follow-up information as a supplement to the Q3 MarketPulse study, which was conducted in the days leading up to the 2013 government shutdown. The government may be back in working order,
but consumer confidence has not bounced back so quickly. In fact, many consumers are tightening their wallets this holiday season in order to build a safety net in case of another shutdown.

Along with a lack on confidence in their personal finances, consumers now display an overall lack of confidence in the U.S. government’s ability to pass a 2014 budget that will avoid the debt ceiling crisis. Only 15 percent of consumers are confident that the government will reach an agreement, while the majority (53 percent) is skeptical as to whether the government can avert another shutdown. Thirty-two percent remain uncertain. If the country does hit the new debt ceiling, and the government is forced to shut down in early 2014:

  • 57 percent of consumers expect their financial strain to increase, versus 46 percent who anticipated increased strain before the October 2013 shutdown
  • 45 percent of consumers say they will have less money to spend on groceries, versus 35 percent before the October 2013 shutdown
  • 44 percent of all consumers say they will have to reduce/eliminate trips to some of their favorite stores, compared to only 31 percent before the October 2013 shutdown

Consumers are prepared to strap down their wallets at any sign of trouble, and the impending debt ceiling crisis and plausible government shutdown is no exception. CPG retailers and manufacturers must keep a close eye on the situation and be prepared to react rapidly to whatever happens next. As challenging as this time is, it is also a critical opportunity to protect and grow loyalty by ensuring that key consumers know that their preferred CPG companies have their backs and are making efforts to support them by providing strong value every day, particularly in the event of another yet another financial obstacle .

Consumers Still Feel Wary of Economic Future Heading Into the Holidays

Tuesday, October 25th, 2011

We’ve had a busy week here at SymphonyIRI with the release of our Holiday Shopping 2011 survey results and Point of View, “Gray Skies: Consumers with negative views of government’s handling of the economy have hunkered down and reined in spending—for the long haul.” Both uncovered similar trends and while it is no surprise consumers are still feeling wary about the economic future, attitude toward spending is directly reflected upon their shopping behavior.

The Holiday Shopping 2011 survey that looked at shopping attitudes of 2,000 consumers (a nationally representative sample) found that this holiday season 81 percent will be turning to the Internet for the best deals and shopping online this year.  While consumers expressed a desire to have a holiday season consistent with those experienced prior to the economic downturn, they are being extra conscious about exactly how and what they are spending their money on this year.  A few examples of money saving strategies during the holiday season include:

  • 79 percent of consumers will be making their grocery purchase decisions before entering the store
  • 26 percent plan to spend less on holiday gifts with most budgets (74 percent) topping out at $800 for gifts
  • 48 percent of consumers will take advantage more often of promotions learned online versus 50 percent, who will leverage online promotions with the same frequency as last year

While the holiday survey took a thorough look at holiday spending trends, many similarities with regard to shopper outlook was uncovered in the ”Gray Skies” Point of View  that indicated 82 percent of shopper behavior is being impacted by negative feelings towards government spending, resulting in uncertainty that will undoubtedly impact holiday budgets.

This tightening of the belts has caused consumers to continue being creative with their saving and spending habits. And, thanks to the Internet and new technology, efforts to save money often are quick and easy, even literally at consumers’ fingertips on smartphones and other devices.

Between the Holiday Shopping 2011 research and the “Gray Skies” Point of View, it’s clear that the common and familiar theme among consumers of being conscious of personal finances, planning for the future and getting creative with savings and purchase decisions is here to stay. As the uncertainty of the economic future remains, it’s clear that the mindful spending habits of consumers will also continue creating an opportunity for manufacturers and retailers to capitalize on money saving promotions, strategies and programs.