retail

How We Cut: Restaurants First, Video Games Last

diningWhile there's no shortage of consumers who are dialing down their spending--just in case you happened to miss all those "50% off! Pre-holiday special!" signs--NPD Group offers a little insight into what consumers axe first when they are worried.

Based on its latest monthly Consumer Spending Indicator study, only 35% of those surveyed say they have not changed their spending patterns as a result of economic changes--a seven-point decrease since it began the poll back in April. This month, when asked how they planned to trim the fat, dining out is in the hot seat--with 57% of respondents saying they plan to spend less. Clothes were the next casualty, with 54% cutting back--followed by entertainment, with 50%. Somewhat safer were beauty products and music, both identified as categories to cut by 44% of the survey, and movies at 43%. Only 39% say they plan to spend less on toys, and 35% on video games.

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While the news is certainly downbeat for retailers, there are pockets of opportunity to connect with shoppers, NPD notes. In the same seven-month period, for example, coupon use among the same survey group has risen from 23% to 27%, and those who are shopping at sales have increased to 28% from 25%.

How long consumers will continue to tweak their purchasing habits is anyone's guess, but Nielsen reports that as far as people are concerned right now, the changes are for the long haul: In its recent survey, 86% of U.S. consumers believe the economy is in a recession, and 54% think it will last at least a year.

Younger consumers are the least hopeful, and only 6% of those between the ages of 25 and 29 believe the recession might end in less than a year. (Nielsen chalks that up to the fact that they are less aware of previous downturns.) Those in the 65-plus category come in second in the pessimism parade, with only 7% saying they believe that recovery in less than a year is possible.

Overall, men tend to be less likely to believe we are in a recession, and more likely to believe the economy will bounce back fast.

Like NPD, Nielsen's survey found extensive evidence of just how hard Americans are trying to cut corners, and where. Only 4% reported making no change at all, with 67% trying to save on gas and electricity, 56% cutting back on entertainment, 55% on clothes, and 54% driving less often.

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