The Great Recession has made consumers reconsider purchases that were once made without much thought. Perhaps, the new thinking goes, you don’t need a new wardrobe every season or a new refrigerator every two years. Perhaps you should only make these sorts of purchases when they are truly necessary. But, speaking of necessities, don’t you know that you need the latest smartphone, and that you need to have your daily latte?
This new take on where consumers are happy to scale back and where they’re more than willing than splurge is revealed through data in several recent surveys:
66% A new survey from Valpak says that 66% of consumers search more for coupons and discounts than in previous years. Also, 79% of those surveyed say they plan on spending the same or less than they did last summer.
93% The 2010 American Pantry Study from Deloitte shows that 93% of consumers expect to continue spending cautiously on groceries even as the economy improves, and more than half (55%) have decided to cut back not because of a decrease in income but because they felt they should.
So then we’re saving more, being frugal, and being careful about everything we purchase, right? Not necessarily.
$40 A BusinessWeek story on “The New Abnormal” cites a recent Consumer Reports survey revealing that monthly retail spending among consumers is actually up $40. How we’re spending that extra money is a complicated mix: We’re using more coupons and cutting back on clothes shopping and eating out at the same time we’re spending freely on $4 lattes, days out at the spa, and iPads. At the end of the day—or billing cycle, if you will—we’re spending more money overall.
So then we’re not doing all that good at saving, then? Not necessarily.
6.4% That’s what the personal savings rate was in June. That’s the highest it’s been in a year, and it’s much higher than the near-zero rate in free-wheeling pre-recession times, as reported by the Washington Post and others. The savings rate factors in a lot more than what most people would call “shopping,” however; real estate and debt are factored in, and consumers are clearly more reluctant (or not able) to get into the housing market and have been paying off credit card and other debts more so than they’ve done in the past.
So apparently, in a manner that’s schizophrenic but somehow logical and justifiable, we’re spending more on some things, less on others.
1.8%, 3.6% Those are percentages for the increase in money spent on electronics (TVs, computers, phone, and video equipment) and the decrease in expenditures on home appliances, respectively, for the first six months of 2010 compared to the first half of 2007, according to the WSJ. Furniture sales decreased 11% during that same time frame, and data also indicates that consumers are scaling back on buying clothing, favoring new kinds of accessories instead, such as an iPhone.
So then are consumers spending more on what they need, rather than on stuff they merely want? I suppose they think they are doing that. But the truth is that, both before and after the recession, the vast majority of expenditures were and continue to be wants, not needs, no matter how hard your brain works to justify them as modern-day necessities.