Consumer spending in January promises to be flat or up only slightly as a result of several factors that raise concern about economic recovery anytime soon, according to the findings of the latest Consumer Mind Reader survey by America's Research Group (ARG) and UBS.
“Shoppers are going into January with less money, having already spent their gift cards in late December, and having to pay off the flat panel TV sets they bought at pre-Christmas sales,” said Britt Beemer, CEO and founder of ARG. Based on these numbers and other factors, Beemer’s prediction for January retail sales is “flat” or up 0.5 percent.
“The latest survey findings just confirm my prediction that consumers will hold off spending again until Presidents' Day weekend in mid-February,” Beemer said.
The gift card spending rate in December was much higher than usual with 71.1 percent of consumers using them right after Christmas, compared to 54.2 percent last year and 41.3 percent in 2007.
In general, there were more shoppers between Christmas and the New Year this year with 44.6 percent of consumers saying they shopped in the period, compared to 37.8 percent in 2008 and 36 percent in 2007. These consumers were still focused on getting good deals with 74.09 percent saying they only bought items on sale, essentially the same number as in 2008 at 74.6 percent.
The survey found other reasons that consumers are holding back their spending as well:
* 18.9 percent of Americans feel pressured by gas and home heating bills, compared with 8.2 percent last year.
* 12 percent of shoppers see little in the stores they want to buy, a significant increase from last year (9.1 percent).
* 24.9 percent of consumers are buying only when items are marked down by 40 percent to 50 percent, just slightly fewer then the bargain hunters last year (28.8 percent).
The ARG/UBS Consumer Mind Reader Survey consisted of 1,000 telephone interviews conducted Friday, Saturday, Sunday and Monday, Jan. 8-11, at ARG headquarters in Charleston, S.C. The error factor is plus or minus 3.8 percent.