Economy May Be Shaky, But Consumers Still Plan to Spend

By Rieva Lesonsky

What’s the future of consumer spending? According to the latest American Express Spending & Saving Tracker, talk of a double-dip recession isn’t cramping Americans’ style. The survey found that 21 percent of Americans plan to spend more, and 43 percent expect to spend the same, in the next six months compared to the first half of 2011. This represents an increase of 6 percent and 4 percent respectively from 2010.

Bolstering this optimistic outlook is the fact that most (69 percent) of employed Americans surveyed say their job is as stable or more stable this year compared to 2010. And more than two-thirds of those surveyed say their financial outlook over the next six months is more or just as stable versus one year ago.

Who are the biggest spenders? Young professionals are feeling the most confident, with 41 percent intending to spend more, up 18 percent from the same time last year.

Where is the money going? For all consumers, the majority of discretionary spending in the next six months will go to entertainment (91 percent), grooming (88 percent), clothing (86 percent) and electronics (67 percent). In addition, 43 percent of Americans expect to make a large purchase by the end of the year, such as a TV (16 percent), automobile (15 percent), furniture (14 percent), end-of-year getaway (12 percent) or household appliance (10 percent).

Americans are still spending on entertainment. Here’s where their entertainment dollar is going:

• Dining out (65 percent)
• Watching TV or movies at home (via cable TV, Netflix, etc.) (62 percent)
• Enjoying wine, beer or other spirit (51 percent)

Fall fashion is also a key spending area. Young professionals, in particular, are focused on this area with 93 percent planning to buy fall clothing. Top purchases for all consumers in the next six months include:

• Footwear (67 percent)
• Jeans (52 percent)
• Casual or weekend clothes (48 percent)
• Work attire (36 percent)

And more than two-thirds (67 percent) of consumers will make a technology purchase in the next six months, with the top ones being:

• Computer/computer accessories (36 percent)
• Mobile/smart phone (34 percent)
• Video games/gaming device (21 percent)

Consumers are treating themselves with small luxuries, from lattes to lipstick and premium alcohol. Some 67 percent of overall consumers and 89 percent of young professionals admit they plan to splurge on small treats.

Of course, not all Americans plan to maintain or increase spending. For the 31 percent of survey respondents who said they will be saving more in the next six months, here’s how they plan to cut spending:

• Eating at home vs. dining out (81 percent)
• Making better use of the clothes in their closet (55 percent)
• Movie night at home instead of the theatre (46 percent)
• Purchasing less expensive beauty products (42 percent)
• Waiting longer between salon / barber visits (37 percent)

And even consumers who are spending are using coupons. Where do consumers go most often online to find coupons or deals? Groupon topped the list with 15 percent of respondents, and Facebook was close behind at 12 percent—so if you’re not already using these marketing tools, it’s time to check them out.

Image by Flickr user Steven Depolo (Creative Commons)

This entry was posted on Monday, October 3rd, 2011 at 6:00 am and is filed under Marketing, Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


You can leave a response, or trackback from your own site.