• by October 11, 2001

An impressive 77% of Americans say they are confident that a strong economy will return next year, according to a new survey gauging consumers' reaction to the events of September 11. BIGresearch, LLC conducted the Consumer Intentions and Actions Survey between September 27 and October 4, 2001 with Deloitte Research, the thought leadership arm of Deloitte Consulting and Deloitte & Touche LLP. More than 5,100 individuals responded to the survey.

Nearly three-quarters of respondents reported they are acting on President Bush's request to return to normal and maintain their past spending patterns, and that they view this as part of their patriotic duty.

"This is good news for retailers, who weren't expecting the holiday shopping season to be particularly bright this year," said Tara Weiner, Deloitte & Touche partner and Managing Director of Deloitte & Touche's Consumer Business Practice.

"We plan to regularly track consumer sentiment over the next several months to get a read on how this may impact retailers."'

With regard to the holiday shopping season, 70% of the survey respondents plan to spend about the same as last year on their holiday purchases. In addition, nearly 20% plan to buy a car, truck or home electronics within the next six months, while 25% are making "big dollar" vacation travel plans.

"An impressive 77% of Americans are confident that a strong economy will return next year. This consumer optimism about the long-term strength of America suggests that 2002 will be a much better year for the economy, and for retailers in particular,” said Irwin Cohen, Global Managing Partner of Deloitte's Consumer Business Practice.

Shifts in Lifestyles, Spending

While confident about the economy, survey respondents are cautiously optimistic about when their own lives will return to normal. Nearly two-thirds expect to resume a daily routine within six months. Twenty-one percent admit to not knowing when their lives will return to normal, while 6% fear that their lives may never return to a state of normalcy.

"Based on the survey results, it appears that the comforts of home have taken on an added importance," said Carl Steidtmann, chief economist at Deloitte Research.

"Accordingly, as consumers make a lifestyle shift toward more time at home, their spending on food, books, music, home entertainment and improvement will change."

This "nesting instinct" is illustrated by the number of respondents who say they expect to spend more money in coming months on home improvement items and home furnishings, 15% and 14%, respectively. It also appears to have altered some respondents purchase plans for certain lifestyle and nonessential products: Nearly one-quarter anticipate buying less "dress-up" clothing over the next 90 days, and 22% say they will likely be going out to eat less.

Two other notable changes in purchase behavior are the number of respondents who expect to spend less on alcohol and tobacco: 22% and 26%, respectively.

Security purchases up, especially in New York

Nationwide, 37% of respondents say they have changed their buying habits as a result of safety concerns. "In the New York metropolitan area, respondents have been especially cautious, with over 47% making safety-related purchases since September 11, and 15% actually stockpiling water and food in their relatively small living spaces," said Steidtmann. "It's also surprising for a city that leads in wireless communications that 10% are buying new cell phones."

Other key findings of the study were:

* More TV, less shopping -- About a quarter of respondents say they are spending less in mail order catalogs and TV/home shopping. Some of the decline in buying from the home may be the result of the "CNN effect," in which most people's free time has been taken up watching the latest news of the day.

* Improved household "balance sheets" -- Uncertainties about economic and political developments over the near term appear to contribute to a desire to improve household balance sheets. More than two in five respondents expect to pay down their debt over the next 90 days, while 31% believe they will increase their savings.

* Stock Investing Continues -- Roughly 17% of respondents expect to buy stocks in the months ahead, and only three% plan to sell stock. Bullishness was more pronounced among the upper income groups.

* Upscale Specialty Stores Suffering -- Respondents' recent worries about the economy and their own financial situation appear to be impacting their store choices. Roughly one-third of respondents say they have spent less money in upscale specialty stores since September 11. About one in five are shopping less at the traditional types of department stores.