Increased Optimism Still Eludes Retail

May 26, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | CPG & FMCG | Retail & E-Commerce

Consumers appear to be feeling more positive about the overall state of the US economy and less worried about their job security, but they are still making retail purchases cautiously – based on necessity and what’s on sale, according to April 2009 results from the NPD Group Inc.‘s Economy Tracker research.

Data reveals that NPD’s General Economic Perception Indicator rose from 36.5 points in March to 40.8 points in April. The indicator measures consumer concerns regarding the economy on a scale between 0 and 100, with 0 being “very concerned” and 100 being “very confident.”

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Job Security Concerns Fall

The survey also showed a 7% decline in the number of consumers who are “very concerned” about the security of their jobs.

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Spending Intentions Rise

This recent increase in consumer confidence and decrease in job concern has positively affected retail buying behavior, NPD said. NPD’s Retail Response Indicator increased four points from 35.9 points in March to 39.5 in April. However, the overall reading still indicates that consumers are spending only on what they need and are shopping around for the best deals and promotions.

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The Retail Response indicator measures consumer spending intentions on a 0 to 100 scale, with 0 representing “reduce or spend less” and 100 representing “spend more.”

“Consumers are telling us they are still buying only what they need, and that they are motivated to purchase by sales and special promotions,” said Marshal Cohen chief industry analyst, The NPD Group, Inc.

Cohen believes that continued economic progress will eventually begin to stimulate purchasing behavior. “As news of our economy continues to improve and reach the ears of consumers, we will see that they are starting to move beyond just purchasing necessities,” he said. “This movement is critical as we begin to progress through this period of stabilization.”

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