Consumer spending has increased across all evaluated categories, although consumers believe the only categories they are spending more in are in-home food and household care.
New research from Mintel reveals that of the 13 key consumer categories, the only two categories for which consumers claim that they are spending more year-on-year are In-home Food (with a 14-percentage-point net difference of consumers claiming to be spending more in this area) and Household Care (2-percentage-point difference of consumers claiming to be spending more).
Although the country officially exited the recession nearly four years ago and consumer expenditures are up, Americans retain a cautious approach toward purchasing and avoid conspicuous consumption, said Fiona O’Donnell, lifestyles and leisure analyst at Mintel.
“While conservative spending may be a result of lingering concerns over the health of the economy and a fear of debt -- which affects consumers’ shopping behaviors and perception of how they make spending decisions -- it is also likely that consumers’ attitudes have shifted,” she said. “That is, rather than having pride in purchases and all things ‘new,’ consumers now appear to take pride in their ability to cut costs, find deals, and pay lower prices than retail.”
For the first time, Mintel has conducted an extensive comparative audit of U.S. attitudes and consumer markets to identify exactly which market sectors have been the winners and losers of a changed economy, and how consumers have adjusted their attitudes and behavior as a result.
When it comes to where consumers think they are cutting back the most, the out-of- home alcoholic drinks sector appears to have taken the biggest hit with a net difference of 47 percentage points in favor of consumers claiming to be spending less on this area over the past year.
Rounding out the top five areas where consumers believe they have reduced spending include: leisure and entertainment (-37 percentage points), vacations (-36 percentage points), dining out (-33 percentage points) and home and garden (-32 percentage points).
Meanwhile, in terms of actual consumer category spend across the same markets, spend has risen year-on-year to 2012. Sectors seeing the greatest increase in spending over this period include transportation (+7% year-on-year), dining out (+6%), in-home alcoholic drinks (+6%), out-of-home alcoholic drinks (+6%) and home and garden (+5%). Even the lowest increased categories of personal finance (+1.4%) and in-home food (+3%) have seen gains.
In many categories, consumers have been conditioned by a nearly never-ending cycle of sales, coupon offers, members-only discounts, lower-priced product alternatives, etc., to avoid ever paying full price, O’Donnell says.
“Meanwhile, technological advancements of the past five years and mobile technology’s increasing penetration have made price comparisons and strategic shopping more accessible,” she said. “For these reasons, marketers should not expect a swing back to pre-recession impulse buying habits and spending on credit.”