–News Direct–
- Consumers, specifically those with higher household incomes, intend to reduce spending on essentials, experiences, gifts, and indulgences this spring
- The number of higher-income earners cutting back on spending to prioritize saving has increased in Spring 24 compared to previous cycles
- Cost-conscious consumers are increasingly engaging in sales and second-hand shopping as a way to reduce spending
- Despite financial uncertainty, consumers are still eager to take vacations this year, showing resilience in their desire for leisure compared to last spring (2023)
Global professional services firm Alvarez & Marsals Consumer and Retail Group (A&M CRG) released its latest consumer report, Consumer Sentiment Survey Spring 2024, which examines the influence of inflation and resulting changes in consumer spending over the last year, as well as spending outlook for the upcoming six-month timeframe.
This is the sixth chapter of its bi-annual Consumer Sentiment Report, based on a survey of 1,800+ consumers matching the U.S. adult population according to gender, age, ethnicity, region and income. The report delves into shifting behaviors in response to personal finances and economic conditions. It includes insights into consumers' shopping priorities across categories, concerns about increasing prices, vacation plans, and other factors shaping purchase decisions for the upcoming spring season, among other relevant insights.
Our semi-annual survey aims to analyze the influence of ongoing economic concerns on consumer spending patterns, channel preferences, and their overall confidence in financial stability over time. Retailers can utilize the data and insights from our report to develop financial plans, efficiently manage inventory, enhance marketing campaigns, and establish pricing strategies at a category level, stated Chad Lusk, Managing Director at Alvarez & Marsals Consumer and Retail Group. This survey cycle reveals a growing consumer pessimism as we head into the spring season, with intentions to exercise greater caution in spending especially in higher income households.
The study found that:
- Consumer outlook for spring is weaker as consumers are anticipating spending less and having less money versus Fall 23
- Consumers are planning to reduce spending across the board but show the smallest decline in spending intentions for experiences compared to Fall 23, with a rising number of respondents planning vacations this year
- In higher income brackets, there's a notable trend towards prioritizing saving over spending. In the $200K+ income bracket, the percentage of respondents prioritizing saving surged by 12% compared to Fall '23. Across various spending categories, we consistently observed the most significant decreases in desire to spend in the higher income households
- Higher income households are turning to second-hand shopping to save money. The number of respondents earning $100K+ who shop second-hand to save costs increased by 10% this spring.
"Retailers must recognize the cautious consumer mindset and adjust strategic priorities accordingly to align with spending plans," Lusk advised. "Retailers, particularly ones servicing higher income consumers, should anticipate providing discounts and promotions across different categories as the season progresses, also while implementing flexible inventory strategies to minimize overall liabilities, given that those typically less affected by recession or inflation will be spending less.
To download a pdf of Consumer Sentiment Survey Spring 2024, please visit:
https://alvarezandmarsal-crg.com/insight/consumer-sentiment-survey-spring-24/
The Alvarez and Marsal Consumer and Retail Group (CRG) is a management consulting firm that tackles the most complex challenges and advances its clients, people, and communities towards their maximum potential. CRG combines the best of A&Ms broader firm's bias toward action and practicality with deep consumer and retail industry experience. CRG partners with businesses across a wide range of categories including Food & Beverage, Beauty & Personal Care, Grocery, Mass Merchandise, and Apparel & Footwear to drive significant performance improvement.
Contact Details
David Schneidman
dschneidman@alvarezandmarsal.com
Company Website
https://www.alvarezandmarsal.com/industries/retail/retail
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Alvarez & Marsal Consumer and Retail Group
COMTEX_450641411/2655/2024-04-10T11:31:05