Consumer Confidence Down, Credit Card Spending Up
The latest findings from BIGresearch shows that while consumer confidence faltered a bit in September, consumers are using their credit cards more often, and are expecting to buy more items like toys, CDs and electronics heading into the holiday season.
According to the 2010 “Executive Briefing,” 27.4 percent of consumers say they are very confident/confident in the chances for a strong economy in September, a small dip from 27.8 percent in August. This marks the lowest vote of confidence since February, when the response was 27.2 percent.
Meanwhile, 53.8 percent of consumers say they are focused on necessities when spending, about the same as 53.5 percent in August, but below the 56.1 percent in September 2009.
BIGresearch also found that consumers are pulling out their credit cards more often than they were last year. For gasoline purchases, 17.5 percent are using credit cards, while 17.1 percent are using credit cards for groceries, 11.2 percent for dining out and 10 percent for auto repairs. Apparel, vacation travel and entertainment purchases are also being charged more than they were last year.
For the upcoming holiday season, 5.3 percent of consumers are planning on spending more for gifts than they did last year, which is more than the 3.8 percent who said the same last September and the 4.7 percent who said the same in September 2008.
Meanwhile, 32.1 percent said they plan on spending the same, and 35.3 percent said they plan on spending less. Another 22.1 percent said it’s still too early to know.
Familiar clothing labels are more important to consumers this year, according to 46.5 percent, up slightly from 46.1 percent last year.
The 90-day retail spending outlook looks a bit mixed, though some key merchandise categories look to be stronger this holiday season. Toys/games, CDs/DVDs/videos/books, electronics and linens/bedding/draperies are all “up” in August. Meanwhile, women’s casual, men’s dress and men’s casual are “flat,” and other categories like shoes, dining out, sporting goods and home improvement are “down.”
Big-ticket items are all expected to receive more spending in the next six months, with computers and autos expected to see particularly strong boosts in spending. TVs, vacation travel and furniture will also see noticeable increases in spending during the next six months.
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