IRI’s latest Consumer Connect survey shows that regardless of whether Donald Trump or Hillary Clinton wins the White House, household finances are expected to “deteriorate” this year — although Trump might hurt them more.
Still, the researchers said in contrast to the outlook, “consumers have been feeling a bit more optimistic about their personal finances and putting the Great Recession behind them for the past couple of years.”
The quarterly survey said 64 percent of respondents “believe their households’ financial health will decline if Donald Trump is elected compared to 60 percent of consumers if Hillary Clinton is elected.” Subsequently, 40 percent expect their financial health to improve under Clinton, which compares to 36 percent under Trump. The focus of the report was on packaged goods, but clearly showed the impact of the election on consumer spending behavior.
Susan Viamari, vice president of Thought Leadership for IRI, said that while Americans’ “attitudes toward personal finances have improved in recent years, this election process appears to signal a shift in consumer sentiment.”
In a separate report analyzing market trends during presidential elections, consumer spending tends to decline as shoppers are distracted by the election process — especially in the months leading up to election day. The race for the White House also impacts the stock market, analysts noted.
“The changing of the guard at the White House always represents uncertainty, but this year, close to 60 percent of consumers feel that their financial health will deteriorate no matter who is elected president,” Viamari said. “This will absolutely impact retailers and [especially consumer packaged goods] manufacturers, as they brace for a tightening of the purse strings.”
The firm has been researching the “types of trade-offs that consumers make when they feel their budgets are being squeezed” and noted that some behaviors, “such as list-making and shopping at multiple stores, become part of the regular routine, even when finances are looking stable or are improving.”
Regarding those behavioral shifts, the researchers said 62 percent of consumers “who think their finances will decline say they will make written shopping lists, compared to 59 percent who think their finances will improve.” And 75 percent of consumers who feel that their finances will decline will stick to sale items, which compares to 54 percent who expect finances to improve.
With those who expect to tighten their fiscal belts, the survey showed a preference toward buying private label packaged products to save money as well as seeking out new lower-priced brands.
But does this indicate a shift away from doling out money on indulgences? The respondents clearly said “no.”
More than 50 percent noted they still will spend on gourmet food and beverages as well as local and artisan products. And when it comes to online shopping, 39 percent said they preferred to order a variety of items online for in-store pick up.