TORONTO — Financial worries have many consumers reducing spending, yet grocery and pharmacy are two areas where they’re not looking to cut back, according to a survey by Empathica Inc.
Financial worries have many consumers reducing spending, yet grocery and pharmacy are two areas where they’re not looking to cut back, according to a survey by Empathica Inc.
The customer marketing research firm said Thursday that its Consumer Insights Panel survey of more than 6,500 U.S. shoppers revealed that consumers aims to pare expenses across nearly every discretionary spending category. The top three areas expecting declines in consumer spending are in fine dining, furnishings and electronics.
However, staples such as gas, pharmacy and grocery aren’t seeing declines compared with findings from a year ago.
Poll results show that consumers are cutting the least on gas, with almost nine out of ten consumers spending the same or more, Empathica said. In grocery, just one in five consumers reported a spending reduction, while 25% expect to spend more.
| WHERE CONSUMERS SAY THEY’RE CUTTING SPENDING |
Fine Dining — 71% |
Furnishings — 69% |
Electronics — 65% |
Bars — 64% |
Airlines — 62% |
Hotels — 61% |
Clothing — 58% |
Department Stores — 55% |
Casual Dining — 50% |
Home Improvement — 49% |
Convenience Stores — 45% |
Quick Service/Fast Food — 42% |
Pharmacy — 25% |
Supermarket/Grocery — 18% |
Gas Stations — 16% |
Source: Empathica Consumer Insights Panel, Wave 1, 2012. |
Only one in four consumers said they are scaling back spending on pharmaceuticals, with 60% indicating they expect to spend the same and 15% anticipating to spend more.
"The economy is affecting American consumers just as we expected with specific segments continuing to be challenged," Gary Edwards, chief customer officer at Empathica, said in a statement. "The economy as a whole is still on the mend, and although we are starting to see an uptick in the job market, it doesn’t necessarily mean consumers are eager to spend. Uncertainty still remains among consumers, with continued caution around spending on nonessentials."
The top two reasons consumers are reducing spending include concern about taking on more debt and having to pay more for basic housing and utility costs, leaving less money to spend on other items, Empathica said. The top three areas of concern cited by respondents were the economy (31%), debt (25%) and job security (19%).
Empathica’s Consumer Insights Panel also found that 60% consumers think their financial situation is more difficult than six months ago, while nearly a third see their situation as the same.
Still, consumers hold more optimism going forward. One in three respondents expect their financial situation to get much better or somewhat better. Nearly half of consumers between the ages of 18 and 24 have a positive outlook on their financial situation, Empathica said, while only 19% of those over 65 share that view.
"It’s understandable that older generations are more reserved with their discretionary spending,” Edwards stated. "They have experienced several bouts of economic instability throughout their lifetime, while younger generations are more optimistic, technologically savvy and interested in immediate satisfaction. These factors showcase why this generation is eager to spend more on goods that will enhance their quality of life in the short term without necessarily worrying about longer-term retirement needs."
