6 Signs Consumer Spending is Back

Shoppers are returning to their old, free-spending ways.

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After an era of fewer restaurant meals, “stay-cations,” and other cutbacks, shoppers are ready to pull out their wallets again. Not only have retail sales rebounded, but consumers themselves are reporting that they are in the mood to shop. According to two new surveys out this week, we might be on the verge of experiencing the Great Shopping Comeback of 2010. Here are six signs of its existence:

Big plans. According to a new survey by Deloitte, two in three shoppers say they will spend the same or more at retailers this year than last year. While consumers don’t always follow through on their expectations, that’s a pretty good indicator that they’ll be pulling out their credit cards with more regularity.

Greater optimism. The same survey found that four in ten consumers are more optimistic about the economy this year than last year. When shoppers feel more confidence in the economy, then they’re more likely to spend money, because they aren’t as worried about losing their jobs or running out of cash. The shift appears even more pronounced among the rich: According to a recent survey by the Affluence Collaborative, just over half of wealthy Americans (defined as having a household income over $500,000) say they are “extremely optimistic” about their financial situation.

Household economics. Not only do consumers think the larger economy is improving, but two in three respondents to the Deloitte survey said that their own personal situation is the same or better than a year ago, as well. Again, greater confidence usually means greater spending.

Help from ‘friends.’ Among the respondents that spend time on Facebook, Twitter, and other social networking sites, four in ten said they used them to find out about deals and promotions from their favorite retailers. (See Tweeting Their Way Into Your Wallet)

Less exuberance. Consumers might be ready to spend, but they’re not being stupid about it: Respondents to the Deloitte survey said that they would keep their spending in check if energy prices go up or the job market fails to improve. That’s a good thing, because it shows consumers are proceeding with caution and less likely to take on large amounts of debt that they can’t pay off later. Most respondents also said they will continue to shop at less expensive stores in order to save money.

Smarter shopping. Deloitte found that shoppers are increasingly relying on the web, where it’s easier to compare prices. Even those that ultimately make purchases at bricks-and-mortar stores say they first research price and product information online. They also pay a lot of attention to online reviews. (See Staying Safe While Online Shopping)

Respondents to the Affluence Collaborative survey also reported that they are less likely to buy luxuries, with women in particular noting that it was “not right.” Three in four affluent women (defined as having a household income between $200,000 and $500,000) said they only purchase luxuries if they can get a great deal.