Retailers, consumers and prices
A brighter view doesn’t lead to increased spending
Discover’s U.S. Spending Monitor for September rose for the second straight month, climbing 2 points to 89 (based out of 100). Thirty-three percent of respondents said they felt economic conditions were improving, a Monitor high and a 2-point rise from August.
When asked to rate their own financial fitness, 33 percent rated it as good or excellent, up a point from August and the highest percentage in four months. On the flipside, 48 percent said their finances were getting worse, also up a point from the previous month.
Consumers’ spending intentions remained flat. Many industry watchers have said that the recession has created a “new normal” characterized by a more frugal lifestyle and fewer shopping sprees. Even those people who have remained financially secure, and are not among the 9.8 percent of Americans who are unemployed, have reset spending habits.
To that end, WSL Strategic Retail said that only 17 percent of shoppers plan to go back to shopping the way they used to.
“There appears to be no indication consumers are willing to increase their spending, despite a Monitor-high number of them who feel the economy is getting better,” said Julie Loeger, senior vice president of brand and product management for Discover.
That could cause headaches for retailers, who are hoping that consumers will start shopping again heading into the all-important holiday season.
For the sixth consecutive month, less than half of consumers said that they expected to have money left over after paying monthly bills.
One bright spot, if you could call it that, is that only 43 percent of respondents felt economic conditions are getting worse. Forty-six percent felt that way in August.