By Mark Huffman
ConsumerAffairs.com
March 13, 2009
Can things really be that bad? According to America's Research Group CEO and founder C. Britt Beemer they can.
He says the second ARG/UBS Consumer MindReader Survey found that five in nine consumers plan to spend less this year while just 6.1 percent plan to spend more.
"American consumers are hunkered down, bracing for a depression," said Beemer. "The dramatic drops in shopping levels have no match in our database in the last 30 years," he added.
The stimulus package signed into law on February 17 by President Obama is not affecting consumer behavior, according to the survey data. Of those who said they plan to spend less this year, only 10.3 percent said they might spend more now because of the stimulus package. Just 8.9 percent feel the stimulus package will have any real effect in 2009, while 35.9 percent feel it will have more in 2010, and 24.7 percent believe the real impact will come in 2011.
Just 70.9 percent of consumers expect an income tax refund, but they say that at least 70 percent to 75 percent of the refund will go to pay regular bills, debts, and credit card balances.
"It's ironic that 57.6 percent of American consumers say they feel that the stimulus package will benefit them, while their family's personal financial situation continues to decline," Beemer said.
As result of the consumer gloom, sales were down sharply over the President's Day weekend. Over the holiday weekend, only 24.3 percent shopped, the lowest figure recorded in ARG surveys. "All indications tell me that the retail sector is sliding into a depression," says Beemer.
Of the 28 categories of retailers studied in the survey, only membership warehouse clubs saw an increase in store traffic and store sales. Store traffic at membership warehouse clubs jumped from 15.5 percent to 20.1 percent and their sales rose from $29.74 to $32.14 on a per household basis.
All other categories are experiencing a severe downturn:
• Jewelry stores experienced a total collapse with traffic falling from 8.1 percent of Americans shopping there in February 2008 to only 0.5 percent shopping in jewelry stores last month.
• Major department stores saw their store traffic drop from 11.8 percent last February to 5.2 percent in February 2009.
• Appliance/electronics/computer stores fell from 24.0 percent to 17.9 percent in February 2008 to February 2009.
• Toy stores are not immune either, watching their store traffic drop from 13.3 percent to only 5.0 percent.
