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Don’t look for a consumer spending boost in February, Retail Forward says
Retail Forward reports that compared with last February, 29% of households plan to spend less this month while 16% plan to spend more. The most popular Valentine`s Gift? Budget greeting cards.
Consumers are concerned about the job outlook and the economy and so may not be in a spending mood this month, consultants Retail Forward Inc. reports.
Retail Forward reports that compared with last February, 29% of households plan to spend less this month while 16% plan to spend more. 32% of lower-income households said they plan to spend less than they did a year ago, while only half as many plan to spend more.
Valentine’s Day sales may turn out to be a heart-breaker, Retail Forward predicts. Compared with a year ago, more than twice as many households plan to spend less on Valentine’s Day gifts than plan to spend more. The most popular gift idea among survey respondents: budget greeting cards.
Valentine’s Day spending will shape up as follows, Retail Forward predicts:
• 78% of consumers plan to purchase Valentine`s Day gifts this year, spending an average of $88 for all gifts (excluding spending on eating out, movies/theatre/entertainment, or vacations). 88% of the under 35s plan to purchase gifts amounting to $106.
• Only 9% said they would spend more on Valentine’s Day gifts compared with last year. 23% said they would spend less.
• Most gift givers plan to purchase traditional Valentine’s Day gifts -- greeting cards (67%) and candy (40%). The average amount of planned spending (among purchasers) is $11 for cards and $16 for candy. Eighteen percent plan to buy flowers, for an average purchase price of $28.
• Among big-ticket gifts, consumers plan to spend an average of $164 on fine jewelry and $136 on consumer electronics. However, only 5%, and 4% of respondents, respectively, plan to purchase these items.
“The results suggest that households should remain tentative in their spending plans until they become convinced that the economic recovery is for real,” Retail Forward says. “Spending among the lowest income households (under $25,000) remains most vulnerable.”
• 23% of households in January reported that their job security was in better shape than it was last year, nearly the same percentage reported last month. The percentage was greater among higher-income households (30%) and lower among low to middle-income households (20%).
• Assessments of household finances held nearly steady compared with a month ago. 38% of households said their income has improved from last year, while 23% said incomes were worse. A much greater percentage of upper-income households (58%) reported improved incomes.
Retail Forward predicts that retail spending may slowly rebound after this month as consumers receive their income tax refunds and spend out the last of the value on gift cards that they received for Christmas.
Retail Forward’s Monthly Shopper Update Survey is conducted online each month with a sample of 4,000 U.S. primary household shoppers.