No signs of economic recovery anytime this year: that’s the opinion of American consumers interviewed this weekend in the second America’s Research Group (ARG)/UBS Consumer Mind Reader Survey. The survey found that five in nine consumers (56.6 percent) plan to spend less this year while virtually no one, only 6.1 percent, plan to spend more.
"American consumers are hunkered down, bracing for a depression," says C. Britt Beemer, CEO and founder of ARG. "The dramatic drops in shopping levels have no match in our database in the last 30 years," he added.
The stimulus package signed into law on February 17 by President Obama is not affecting consumer behavior, according to the survey data. Of those who said they plan to spend less this year, only 10.3 percent said they might spend more now because of the stimulus package. Only 8.9 percent feel the stimulus package will have any real effect in 2009, while 35.9 percent feel it will have more in 2010. Additionally, 24.7 percent believe the real impact will come in 2011.
Just over seven in ten consumers (70.9 percent) expect an income tax refund, but they say that at least 70 percent to 75 percent of the refund will go to pay regular bills, debts, and credit card balances.
As result of the consumer gloom, sales were down sharply over the President’s Day Weekend. Over the holiday weekend, under a quarter of Americans (24.3 percent) shopped, the lowest figure recorded in ARG surveys.
Of the 28 categories of retailers studied in the survey, only membership warehouse clubs saw an increase in store traffic and store sales, jumping from 15.5 percent to 20.1 percent and sales rising from $29.74 to $32.14 on a per household basis.
All other categories are experiencing a severe downturn:
• Jewelry stores experienced a total collapse with traffic falling from 8.1 percent of Americans shopping there in February 2008 to only 0.5 percent shopping in jewelry stores last month,
•Major department stores saw their store traffic drop from 11.8 percent last February to 5.2 percent in February 2009,
•Appliance/electronics/computer stores fell from 24.0 percent to 17.9 percent in February 2008 to February 2009,
•Toy stores are not immune either, watching their store traffic drop from 13.3 percent to only 5.0 percent.