Consumers Still Cautious, but See Better Holiday Outlook
Jerry Epperson -- Furniture Today, October 20, 2010
COLUMBUS, OHIO - Consumer confidence has dropped to its lowest point since February of this year, declining in September to 27.4% of shoppers asserting they are very confident or confident about chances for a stronger economy.
That level was just slightly below August's 27.8% indication, according to consumer research firm Bigresearch. The February reading was a notch below at 27.2%.
In its latest Consumer Intentions & Actions Survey, which monitors more than 8,000 consumers each month, Bigresearch said the current consumer confidence level is also trending below September 2009 (29.8%) and September 2008 (28.3%), both of which were steeply down from the September 2007 reading of 41.2%.
More bad news: the outlook for the job market dimmed in September, as the U.S. unemployment rate ticked upward to 9.6% in August.
One-third, or 32.0%, of the consumers surveyed predicted there will be "more" layoffs over the next six months, rising from 28.9% in August - and the highest reading since December 2009's 32.5%. The majority, 51.9% of those surveyed, said they felt layoff levels will remain the "same," representing a decline from 53.1% last month. Optimistic for "fewer" layoffs were 16.1%, also a decrease from 30 days ago (18.0%).
There remains some bedrock confidence, however. "Despite rising anxiety for the overall employment situation, workers still seem to be pretty confident about their personal job security," Bigresearch found, citing 4.0% who said they feared the pink slip, on par with the 3.9% rating in August but well below September 2009's 7.8%.
As consumers watch their spending closely, it is little surprise that "debt management appears to be the priority for this fall," as one-third (32.8%) said they intend to pay down debt over the next three months, down slightly from one year ago (34.5%).
At retail, the coming holiday season is on the minds of both the stores and shoppers.
"Consumers might be in a more positive gift-giving mindset this year, as 5.3% intend on spending more on gifts this holiday season, besting readings for September 2009 (3.8%) and September 2008 (4.7%)," Bigresearch reported.
Of the remainder, 32.1% plan to spend the same amount, while more than a third (35.3%) plan to spend less. About one-fifth, or 22.1%, said it's still too early to know. "Expect the economy, unemployment rate, and housing market to be tipping points in consumers' decisions to spend this holiday season," the report warned.
In the home improvement and hardware side of retail, Home Depot at 30.6% and Lowe's at 26.2% continued to dominate among do-it-yourself shoppers. Following not so closely behind were Walmart (7.2%), Menards (4.1%), and ACE Hardware (3.1%).
On the topic of future purchases, "it appears that overall spending sentiment heading into the all-important holiday season has improved, as most product categories are up from September 2009 and September 2008," Bigresearch found - with intentions to buy home decor down, but linens and bedding up.
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