In a nationwide survey of 1,001 consumers conducted by the American Consumer Institute Center for Citizen Research (ACI), 60% of consumers say that the economy is worse today than it was a year ago, while 17% believe the economy is about the same and only 22% believe the economy is better (see www.theamericanconsumer.org).
This gloomy economic assessment coincides with slow holiday spending, where, according to ACI’s just released survey, 49% of consumers expect to spend less this holiday season, while 40% expect to spend about the same and only 8% of consumers expect to spend more. The results confirm the recent news that reported only a modest uptick in retail sales over last year’s depressed recessionary levels.
While the slow economic recovery is bad news for retailers, it may be good news for consumers, as retailers find themselves with elevated inventories and a fast approaching end to the holiday season.
I expect discounting could become very aggressive.
Opportunities for consumer savings should be across the board, and will be most welcome in the sales of electronic goods, the biggest area of gift buying this season, according to experts. According to the Consumer Electronics Association, 80% of consumers will buy some consumer electronics as gifts this holiday season. Slow consumer sales means that there will be great opportunities for consumers to save in the closing days before Christmas. But, consumers need to shop and follow the sales, if they plan to take full advantage of the deals. Don’t assume that retailers will discount across the board or that discount retailers will be the best places to shop. Neither may be true.
As we reported last month, contrary to conventional wisdom that Wal-Mart is the de facto low-priced retailer, according to an ACI study, there was no significant difference between Best Buy’s and Wal-Mart’s average consumer electronic prices – for either online or in-store shopping. In addition, differences between product selection and quality, knowledgeable staff, finding in-store help and free delivery should be all important factors in your search for gifts – factors that are not always evident between retailers. Because consumers sometimes require more information to make informed decisions on the purchase of electronic equipment, consumers may, in many instances, receive a better overall value by purchasing from a full-service retailer. The trick is to do research before you buy. Again, whether you buy consumer electronics or other gifts, shoppers need to do their homework and carefully compare prices.
In summary, consumer need to shop around, compare prices and brands, and follow the advertised specials, if they want to save on their holiday shopping.
As we edge toward the end of this holiday season, these results amplify for consumers, and investors, the importance of comparative shopping before making a purchase.
The full study can be found atwww.theamericanconsumer.org.
Steve Pociask is President of the American Consumer Institute Center for Citizen Research. The American Consumer Institute Center for Citizen Research is a 501(c)(3) nonprofit educational and research institute based in Washington, DC. The Institute focuses on economic policy issues that affect society as a whole, and seeks to be a better and more reasoned voice for consumers, by using economic tools and principles to show that markets work best for the benefit for consumers. It is committed to the use of generally accepted quantitative, cost-benefit analyses of policy alternatives and their transparent application to assure that our methods can be fully and fairly evaluated on their own terms and by those who may disagree with our conclusions.