Retailers and CPG gauging their consumers’ spending prospects see a divided America, whose financial expectations for 2013 vary with the camp they’re in.
On one hand, stockholders and homeowners with high equity positions in their property feel a wealth effect from recent gains in stock and home prices, and may be more optimistic and inclined to spend more.
Consumers like these who want to create distance between them and the recession could shift from comfort foods to more extreme, experimental behaviors that embody “risk taking, playfulness, courage and vulnerability,” says a new Culinary Tides report, Top 10 Trends Analysis – Shifting Sands 2013.
On the other hand, much of the nation continues to spend cautiously because they struggle financially. The impact of the 2% payroll tax on national spending figures has been dulled so far by Federal Reserve monetary support driving the recovery. Yet BNP Paribas economist Yelena Shulyalyeva told Reuters she expects “a significant decrease in real consumer spending in the first half” of 2013. Retailers tell The Lempert Report they believe the same due to the lack of real wage growth, high unemployment rates (7.7%), and rising food, gas and healthcare costs.
For instance, many elderly make tough choices everyday between buying food and medicine. A new University of Georgia study documents that nearly half (48.7%) of food-insecure Medicare patients also didn’t adhere to their medication regimens.
Moreover, parts of the nation beset by natural disasters—among them fires in the West and Hurricane Sandy floods in the East—hurt residents who are attempting to rebuild, often on their own.
It isn’t surprising then that 28% of Americans aren’t confident about saving enough money for retirement, and only 13% are “very confident,” according to the Employee Benefit Research Institute. This is the highest anxiety level in the 23 years EBRI has tracked this—only “2% of workers and 5% of retirees say that retirement is their most pressing issue” today, reports USA Today.
Indeed, a new Pew Research Center study says 32% of U.S. moms with children under 18 would prefer to work full-time, up from 20% in pre-recession 2007—a probable sign of the urgency they feel to make ends meet.