Concerns over jobs and the economy continue to influence consumer spending.
Only 29.9% of consumers in a new survey reported that they would buy more in May, the lowest level of spending by consumers in 30 years, according to America’s Research Group/UBS Consumer Mind Reader Survey.
The slight upticks in consumer spending seen last month were limited to a very few retailers and were “totally replacement driven,” C. Britt Beemer, CEO and founder of consumer research and marketing firm, ARG, said in a release.
“No discretionary spending is going on in America,” he said. “People are not even thinking about buying things.”
Almost half of the consumers cited bills for the mounds of credit card debt they have piled up as the reason for the low discretionary spending. Back bills and debt also played a role in the continued worry over spending, by more than a third of respondents. Another 7.7% are spending less due to gas and heating costs.
“This is the first time in 30 years of consumer surveys that we’ve seen this low interest in shopping,” Beemer said.
Consumers are shopping out of need, not want, the survey found.
National department stores, appliance and electronic stores and home improvement stores saw a slight increase in shopping as consumers replaced non-working household appliances. And furniture stores had a very slight increase as people made purchases to replace worn out furniture items. Garage sales and flea markets saw increases in shopping levels as creative shoppers found bargains.
Promotions, sales and discounts continue to drive sales.
Over a quarter of consumers reported only buying items on sale at 50% off. Discount apparel stores saw women wanting bigger deals and big savings.
Retailers hit the hardest were apparel and jewelry stores based in malls where shopping levels dropped 50%.
The survey consisted of 1,000 telephone interviews conducted May 1 – 3, 2009, at ARG headquarters in Charleston, SC. The error factor is plus or minus 3.8%.
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