More consumers in the U.S. are planning cuts in discretionary spending in the next 12 months than the consumers in eight other regions worldwide — and apparel is the number-two item on Americans’ lists of things to cut back on, according to a new report.
This story first appeared in the May 4, 2009 issue of WWD. Subscribe Today.
Nearly three-quarters of American adults polled in March by Boston Consulting Group projected they’ll be parting with fewer discretionary dollars, the consultant disclosed in “Winning Consumers Through the Downturn,” a global survey on consumer sentiment conducted among 21,800 people.
U.S. consumers expect to slash outlays by an average of 18 percent — a deeper dent than that anticipated by the populations of any of the other locales.
Apparel also registered as a sinking priority in four other countries: Japan, Brazil, China and Mexico. As in the U.S., clothing was the second most likely product to see diminished outlays in those places.
In the European Union, fashion accessories rated number one on the list of anticipated pullbacks.
Overall, travel-vacation was earmarked as the top category for cutbacks, followed by restaurants-fast food.
The biggest part of budget cutters in the U.S., four in 10, said they’re planning to save more. Another three in 10 curtailing discretionary spending said they expected to be earning less, and an equal share cited worries over possible job losses as a reason for tighter purse strings.
The “Starbucks effect” — tossing $3 or so, which might otherwise have been saved, into a cup of coffee — does not appear to be evaporating in the U.S., however. About two-thirds polled here haven’t begun purchasing less costly coffee or tea and don’t plan to, and another 2 percent are buying more expensive types of these drinks or plan to do so, according to BCG.
This enduring taste for upscale beverages doesn’t point to renewed optimism about the economy’s prospects, though.
More than half of America’s consumers, or 56 percent, expect the “economy will get even worse in the next 12 months,” trailing only those in the European Union (60 percent) and Russia (59 percent) in their pessimism. This marks a 24 percentage point deterioration of confidence in the U.S. since October, when Boston Consulting Group last surveyed consumers worldwide.
A big spike in the American public’s “anxiety about the future” steepened the slide, compared with Americans’ moods six months ago, according to the new report on consumer sentiment. People in the U.S. registered as the third most anxious, with 63 percent of those surveyed noting such feelings. Most anxious were the seven in 10 Russians and two-thirds of Japanese polled, who expressed the same mood.
Not surprisingly, people in the U.S. are saying they’re most likely to cope with tough economic times by significantly decreasing spending on “nonessential items” and deferring “major expenses that can wait.” Also in their game plans is purchasing more products that are discounted or otherwise promoted, spending more time shopping for the best prices and shopping at discount stores more often.