Less than Optimistic
Posted: 08 Dec 2008 07:29 PM CST
Analysts naturally factor in the number of people who are out of work when they try to figure out future consumption patterns. But there is more to it, of course. People who are afraid they might lose their job are just as likely to economize or clamp down on spending as those who have no real choice in the matter. In fact, some might say that changes in the attitudes and behavior of the 85-95 percent (depending on which statistics you believe) of those who are employed matter much more than the financial wherewithal of those who aren’t. Under the circumstances, the following Reuters report, “More Americans Worried About Jobs,”
offers little reason for optimism.
One-third of U.S. consumers are worried about their jobs, a growing number that should be the latest sign of concern for retailers during the key holiday shopping season, a consumer research firm said.
“Job security (concern) is the only thing that will shut a customer down from shopping,” Britt Beemer, founder and chief executive of America’s Research Group, said.
In questions asked for Reuters as part of a larger survey, 33.6 percent of respondents said they were concerned about job security. That number is up from about 24 percent a month ago when a similar question was asked, and up from about 3 percent last year, Beemer said.
The survey was conducted just after the Labor Department announced that U.S. employers cut 533,000 jobs in November, the most since 1974.
Retailers are in the midst of what some experts see as the worst holiday season in nearly two decades, as job losses, the credit crunch and falling home prices all push consumers to keep their wallets shut.
In the America’s Research survey, 25.4 percent said they had already completed their holiday shopping, compared with only about 18 percent to 19 percent who were finished at this point last year, Beemer said.
“That’s not good for retailers,” he said.
Also, 24.3 percent said that the stock market’s declines were impacting their ability to spend. That was up from 16 percent who answered a similar question a month ago, Beemer said.
U.S. retailers have already seen the impact of weak spending. Sales at stores open at least a year fell 2.1 percent on average in November, according to Thomson Reuters data. That number fell to a 7.8 percent decline when Wal-Mart Stores Inc was excluded.
Wal-Mart has been the winning retailer so far this season, attracting consumers with low prices on many items.
According to the survey, 9.3 percent said they shopped at Wal-Mart for the first time this year.
Of those, a whopping 98.9 percent said they would shop there again and the same number said they would continue to shop there once the recession ends.
“We’re now watching a retailer take over the Christmas shopping season,” Beemer said.
In other results, 41 percent said that they feel more guilty about spending money when others are struggling more this year and 38.6 percent said they were waiting until closer to Christmas to get better deals.
The survey included 1,000 people and had a margin of error of plus or minus 3.8 percent.
