According to the Empathica Consumer Insights Panel, 61 percent of American consumers report reduced spending, citing concerns around debt and increasing costs for basic needs.
Toronto, Ontario, Canada – May 17, 2012 – Empathica Inc., a leading global provider of Customer Experience Management (CEM) solutions to more than 200 of the world’s most respected brands, announced today that its Consumer Insights Panel survey of more than 6,500 U.S. consumers found that consumers plan to cut expenses across nearly every discretionary spending category. The top three areas expecting decline are in fine dining, furnishings and electronics. By contrast, staples including gas, pharmacy and grocery are not seeing declines compared to findings from this time the previous year.
Survey results show that consumers are cutting the least on gas with nearly nine out of ten consumers spending the same or more. When it comes to grocery, only one in five consumers reported a spending reduction versus 25 percent who expect to spend more. The survey also found that one in four consumers are cutting spending on pharmaceuticals, with 60 percent spending the same and 15 percent actually spending more.
Top Segments Where U.S. Consumers are Cutting Spending
- Fine Dining (71%)
- Furnishing (69%)
- Electronics (65%)
- Bars (64%)
- Airlines (62%)
- Hotels (61%)
- Clothing (58%)
- Department Stores (55%)
- Casual Dining (50%)
- Home Improvement (49%)
- Convenience Stores (45%)
- Quick Service/Fast Food (42%)
- Pharmacy (25%)
- Supermarket/Grocery (18%)
- Gas Stations (16%)
“The economy is affecting American consumers just as we expected with specific segments continuing to be challenged,” said Dr. Gary Edwards, chief customer officer, Empathica. “The economy as a whole is still on the mend, and although we are starting to see an uptick in the job market, it doesn’t necessarily mean consumers are eager to spend. Uncertainty still remains among consumers with continued caution around spending on non-essentials.”
The survey revealed that the top two reasons consumers are cutting spending include concern about taking on more debt and having to pay more for basic housing and utility costs, so there is less money to spend on other things. In fact, consumers’ top three areas of concern include the economy (31%), debt (25%) and job security (19%). On the other hand, consumers are less concerned about the environment, crime and housing.
U.S. Consumers’ Financial Situation and Economic Outlook
The Empathica Consumer Insights Panel also surveyed U.S. consumers on their financial situations and economic outlook. Sixty percent of consumers revealed their financial situation is more difficult than the same time six months ago, while nearly a third found their situation the same.
Despite financial difficulty, consumers are more optimistic on their financial situation when looking ahead. Results show that one in three consumers think their financial situation will be much better or somewhat better. Nearly half of consumers between the ages of 18-24 have a positive outlook on their financial situation. However, this optimism declines consistently as we look across each age range with only 19 percent of those over 65 expressing these sentiments.
“It’s understandable that older generations are more reserved with their discretionary spending,” said Edwards. “They have experienced several bouts of economic instability throughout their lifetime, while younger generations are more optimistic, technologically savvy and interested in immediate satisfaction. These factors showcase why this generation is eager to spend more on goods that will enhance their quality of life in the short term without necessarily worrying about longer term retirement needs.”
For more information on the results of this study, visit http://www.empathica.com/consumer-insights/wave-1-2012-key-trends/.
About the Empathica Consumer Insights Panel:
The Empathica Consumer Insights serves as an authoritative voice on consumer based economic indicators; the retail, financial services and restaurant industries; consumer shopping intentions and customer satisfaction as reported by thousands of consumers in the U.S. and Canada. Results from Empathica’s Consumer Insights, led by Dr. Gary Edwards and Empathica’s Consumer Insights team, are published several times a year. The results are based on outbound Internet surveys with Empathica’s growing Insights Panel, derived from more than 30 million consumer surveys per year. Results have been weighted to reflect latest Census distributions in the U.S. and in Canada, including Region, Gender, Age and Income.
Aforementioned data is reported by the Empathica Consumer Insights Panel – Wave 1 2012.