Commentary

Consumers Are Anxious, Investors Are Confident This Month

Consumers Are Anxious, Investors Are Confident This Month

According to the overview of the BIGresearch Consumer Intentions & Actions Survey in early in mid-July, consumers are anxious and conservative. In summary, their major findings are:

  • Consumer confidence drops 2 points from June
  • Practicality among consumers rises just slightly in July
  • Consumers fearing a rise in layoffs over the next six months
  • Shoppers continue to tell their retailers (and gas station attendants) to charge it
  • Price-conscious consumers continue to head to Wal-Mart for Women's and Men's Clothing
  • Shoes, shoes, and more shoes
  • Six month purchase intentions down in July for most big-ticket items
  • Batman is back

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Some of the significant analysis includes these observations:

With rising gas prices and the recent London terror bombings on minds, consumer confidence drops to 43.7%. As can be expected, worry over political and national security issues increases two points to 18.0% in July, which ends a two month decline...still lower than one year ago (24.3%), says the report.

Contrary to the dip in the unemployment rate in June, faltering confidence and worry about international affairs seems to have consumers fearing a rise in layoffs over the next six months...those believing there will be "more" rises to 31.8% (v. 29.7% in June). However, personal concerns with becoming laid off flat to down slightly from June, now at 4.1% and down from 5.0% in '04.

Investor confidence in the stock market is up slightly from June...59.8% report that they'd definitely/probably invest, compared to 59.2% last month. 

This month, fewer consumers plan to pay with cash more often and decrease overall spending.  Top financial plans "pay down debt" and "increase savings" remain flat from June and down from '04, so it appears that debt and savings are losing out in order to accommodate higher prices at the pump. 

Almost one-third (31.5%) of consumers are decreasing vacation travel, 27.1% of drivers are reducing dining out, one in five (21.8%) are reeling in spending on clothing, 16.3% have delayed a major purchase, and 15.6% are cutting back at the grocery store. 

 Six month purchase intentions are down in July for most big-ticket items: computer, furniture, home appliances, house, major home improvement/repair, RV/boat, stereo equipment, DVD/VCR, and digital camera.  Car/truck, jewelry, and TV flat from last month. 

Retail Merchandise Categories - 90 Day Outlook
July 05 compared to June 05 and July 04

Category

June 05

July 04

Children's

UP

UP

Toys and Games

DOWN

DOWN

Women's Dress

DOWN

DOWN

CDs/DVDs/Videos/Books

DOWN

DOWN

Women's  Casual

DOWN

UP

Electronics

DOWN

UP

Men's Dress

DOWN

FLAT

Groceries

DOWN

DOWN

Men's Casual

DOWN

UP slightly

Home Improvement

DOWN

DOWN

Shoes

DOWN

DOWN

Lawn & Garden

DOWN

DOWN

HBC

DOWN

UP

Home Furniture

DOWN

DOWN

Dining Out

DOWN

DOWN

Decorative Home Furnishings

DOWN

UP

Sporting Goods

DOWN

DOWN

Linens/Bedding/Draperies

DOWN

FLAT

Source: BIGresearch, july 2005

 

For more BIG insights, look here.

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