Americans Plan to Continue Cutting Back on Spending, Survey Shows
According to a recent CNBC-Morning Consult survey, U.S. consumers have been reducing their spending this year and intend to continue doing so throughout the holiday season. The survey, conducted among 4,403 U.S. adults, revealed that a significant majority (92%) have already scaled back their spending over the past six months. Consumers remain cautious and are becoming more discerning about when and where they choose to spend their hard-earned money.
Factors Influencing Spending Habits
Several factors contribute to this trend. While inflation has decreased, it remains persistently high, which has made consumers more cautious about their spending. Additionally, broader economic uncertainty, including labor unrest such as the strikes by auto workers in Detroit and writers and actors in Hollywood, has put consumer companies on alert.
Categories of Spending Cuts
The survey identified the most common categories where consumers have reduced their spending over the past six months. These include clothing and apparel (63%), restaurants and bars (62%), and entertainment outside the home (56%). Grocery expenses (54%), recreational travel and vacations (53%), and electronics (50%) were also among the areas where consumers have made cuts.
Impact on Holiday Shopping
Looking ahead to the crucial holiday shopping season, the survey issued a warning to retailers. A significant majority of U.S. adults (76%) plan to further reduce spending on non-essential items, while 62% expect to cut back on essential items "sometimes" or "more often" over the next six months.
Varying Impact Across Socio-Economic Groups
The survey findings highlight that the impact of the current economic situation varies among different socio-economic groups. Surprisingly, it is not always those with lower incomes who feel the greatest pinch. While 55% of households earning $50,000 or less reported feeling the impact on their personal finances, 61% of households earning $50,000 to $100,000, and 46% of households earning over $100,000 reported the same.
Changing Sentiment for Higher-Income Households
Notably, higher-income households have experienced a significant shift in sentiment compared to previous surveys. In June, more than half of higher-income consumers (55%) reported feeling a negative impact on their finances. However, the latest survey indicates that higher-income households are moving towards perceiving the economic situation as having a positive impact, with 30% expressing this sentiment in September, up from 21% in June.
In conclusion, the CNBC-Morning Consult survey reveals that Americans are continuing to cut back on their spending habits, with a majority planning to maintain this trend during the upcoming holiday season. The survey's findings highlight the cautious approach of consumers and the impact of economic factors on their spending decisions. Understanding these trends can help businesses adapt their strategies to meet the evolving needs and preferences of consumers in these challenging times.
The CNBC-Morning Consult survey's findings present a significant challenge for new businesses, particularly those in the retail sector. With consumers planning to continue cutting back on spending, businesses may need to rethink their strategies to attract and retain customers.
Implications for New Businesses
New businesses, especially those in sectors where spending cuts are most prevalent, may need to innovate and find ways to offer value to increasingly discerning consumers. This could involve focusing on essential products, offering competitive pricing, or creating unique experiences that consumers are willing to pay for.
Given the changing sentiment among higher-income households, new businesses might also consider targeting this demographic with premium offerings. Additionally, understanding the varying impact of the economic situation across different socio-economic groups can help businesses tailor their marketing and sales strategies to the needs and preferences of these groups.
In conclusion, the continued trend of reduced consumer spending, as revealed by the CNBC-Morning Consult survey, presents both challenges and opportunities for new businesses. By understanding these trends and adapting their strategies accordingly, new businesses can navigate this challenging economic landscape and position themselves for success.