Consumers Planning to Hold Back

by Jack Loechner, Sep 26, 2005, 3:00 AM

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Consumers Planning to Hold Back

The recent release of BIGresearch's Consumer Intentions & Actions Survey for September points out that conservatism is the name of the game regarding personal finances, with the majority of consumers contend they're practical spenders.

Some key findings in September are:

• 27.9% of consumers are worrying about political and national security issues, up from 17.0% last month and a new high for '05.
• Purchasers focused on needs over wants has skyrocketed to 61.1% in September, up from 47.1% in the previous month and a new high
• 19.7% of respondents say fluctuating gas prices have had no major impact on spending
• 60.2% say they are simply driving less 
• 43.8% are decreasing vacation/travel
• 42.6% are cutting back on dining out
• 33.6% are spending less on clothing

41.7%  of respondents plan "pay down debt," up from 36.3% in August

"decrease overall spending" is a close #2 with 40.2%, up more than 10 points from last month 29.2%. 

In the "advance Holiday '05 Outlook,"  it appears that the devastation in the Gulf, rising pump prices, and forecasted increases in home heating costs this winter have consumers thinking more conservatively this season. 

• 21.7% say it's too early to know,
• 34.7% plan to spend less on gifts than they did last year (compared to 27.9% in 2004)
• 33.7% plan to spend the same (versus 40.8% last year)
• 6.3% intend to spend more (down from 7.6% in '04)

The 90 Day Outlook On Retail Merchandise Categories Compared To August 05 And September '04
Category	August 2005	September 2004
Children's	DOWN	DOWN
Toys and Games	FLAT	DOWN
Women's Dress	DOWN	DOWN
CDs/DVDs/Videos/Books	DOWN	DOWN
Women's  Casual	DOWN	DOWN
Electronics	DOWN	DOWN
Men's Dress	DOWN	DOWN
Groceries	DOWN	DOWN
Men's Casual	DOWN	DOWN
Home Improvement	DOWN	DOWN
Shoes	DOWN	DOWN
Lawn & Garden	DOWN	DOWN
HBC	DOWN	DOWN
Home Furniture	DOWN	DOWN
Dining Out	DOWN	DOWN
Decorative Home Furnishings	DOWN	DOWN
Sporting Goods	DOWN	DOWN
Linens/Bedding/Draperies	DOWN	DOWN
Source: BIGresearch's Consumer Intentions & Actions Survey, Sept. '05

Finally, the University of Michigan found that consumer optimism sinks as gasoline prices rise. Richard Curtin, the Director of the University of Michigan's Surveys of Consumers, noted that the unusually large August decline was widespread among all demographic groups and across all regions of the country. He said "Consumers anticipated higher inflation, higher interest rates, higher unemployment and a slower pace of economic growth during the year ahead,"

At least one bright spot...purchase intentions for high-dollar durables are up compared to last month and last year. 10.4% plan to buy a vehicle in the next 6 months, up from 9.6% in August and 9.6% in '04.

For more information on BIG Consumer intentions, go here.

For  the University of Michigan release, see this release.

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