Consumers Restrain Spending; Recessionary Mindset Lingers
The effects of the recession and curbing retail spending are still top of mind for many cash-strapped Americans, according to the results of a Nielsen survey.
“Spending setbacks for many Americans translated to weaker-than-expected holiday sales at retail,” said James Russo, SVP, Global Consumer Insights, Nielsen. “Online intentions during the holiday season, however, fared better, as 46 percent said they shopped on Cyber Monday, an increase from 30 percent last year. As we enter 2014, the U.S. consumer remains bifurcated, cautious and pragmatic.”
Although U.S. consumer confidence declined four index points in the fourth quarter of 2013, it was up five points from the same period last year, according to the survey.
Q4 also saw a decline in discretionary spending from Q3 for buying new clothes (24 percent) and paying off debts, credit cards and loans (31 percent).
Compared to Q3, spending on home improvements (19 percent) and out-of-home entertainment (18 percent) also saw 5-percent and 6-percent decreases, respectively. Meanwhile, stashing cash into savings (39 percent) decreased four percentage points and buying new technology (17 percent), also saw a four-point decline.
Overall, 71 percent of Americans said the recession is their top concern, and 26 percent said the economy is their top concern. However, the U.S. saw a decrease in recessionary sentiment of 14 percentage points compared to the start of the recession, Nielsen concluded from the survey.
“While U.S. consumer confidence declined in the fourth quarter, the country is poised to be the key growth engine of the world economy,” said Dr. Venkatesh Bala, Nielsen. “One of the biggest challenges for the U.S. consumer will be getting wages and incomes to grow to support consumer demand, especially for the middle class.”