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Survey: Consumer Spending Set for Modest Increase

COLUMBUS, Ohio - The short-term outlook for consumer spending has improved -- if only modestly -- with the approach of spring and the arrival of tax refunds, according to results from the latest online Retail Forward Monthly Shopper Update Survey of 4,000 U.S. primary household shoppers.

"The first wave of refund checks, with amounts that are tracking significantly higher than last year, appears to be lifting some of the caution that has persisted in recent months," noted Steve Spiwak, an economist with the global management consulting and market research firm.

Expectations for consumer spending over the next month registered a slight bounce compared with last month's survey. Middle-income households (between $25,000 and $75,000) showed the biggest improvement. These households are benefiting disproportionately from new provisions for marriage penalty relief and higher child credits implemented as part of last year's tax legislation –- resulting in larger tax refunds.

By contrast, higher-income households have eased up on their spending in response to a stock market that seems to have leveled off following a strong surge over the past year.

Additional results on consumer spending are as follows:

- Compared with spending at this time last year, 18 percent of all households plan to spend more this month. That's an increase from last month, when 16 percent of households reported plans to spend more.

- Among middle-income households, 19 percent plan to spend more, up from the 16 percent that reported stronger spending plans in February. Further, the percentage planning to spend less in March decreased to 26 percent from 29 percent the month before, adding additional momentum to the anticipated spending pace.

- The proportion of upper-income households ($100,000 and more) planning to spend more in the month ahead declined slightly to 19 percent from 21 percent. However, that falloff was offset by a similar decrease in the proportion planning to spend less.

With the advent of new diets, many of them stressing low-carb foods, shoppers now have to interpret more definitions of "healthy eating." According to the survey, large percentages of Americans are making an effort to eat more healthily, which equates to an increase in planned purchases of low-fat, fat-free, and low-carb products. "The search for youth among aging Baby Boomers is a key driver behind the growing interest in new diets," Spiwak observes.

With regard to food choices, the survey found that:

- More than half (57 percent) of respondents agree that they are "consciously buying healthier foods," much larger than the percentage that disagree (12 percent).

- However, many said they would eat healthier foods more often if they were less costly (52 percent), easier to prepare (37 percent), or tastier (37 percent).

- Additionally, 37 percent of consumers said they're buying more low-fat or fat-free products than they did last year, and 32 percent said that they intend to purchase more low-carb items in the next six months than they did in the past six months. Consumers between the ages of 35 and 54 were much more likely (35 percent) than other age groups to plan to buy more low-carb foods.

- Fifty-one percent of households said that speed and ease of preparation are among the biggest considerations in deciding on food purchases.
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