Consumers are spending more – we just don’t think we are, according to a new report, “American Lifestyles 2013: Five Years Later,” from Mintel, a market research company. The firm’s study of 13 consumer markets revealed that more people think their spending has increased than think it decreased in just two categories, food eaten at home and household care. In reality, though, we’re spending more across all categories.
Mintel concludes that the discrepancy sheds light on just how much Americans continue to embrace a “recessionary” mindset despite the economic recovery. Consumers continue to say they pay close attention to price comparisons, coupons and discounts – leftover habits, perhaps, from leaner times. Almost 7 in 10 survey respondents said they still pay more attention to the price of products today. Almost half said they plan out their shopping before they go, and two-thirds said they spend money more cautiously.
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What the recession has shifted, says senior lifestyles and leisure analyst Fiona O’Donnell, is Americans’ attitudes. She says today, five years after the height of the recession, we are still looking to cut costs and take “pride” in “our ability to cut costs, find deals and pay lower prices.”
Some of those behavioral change extend far beyond the shopping mall. About one-third of respondents say they cook and bake more often from scratch and are more likely to entertain at home rather than go out. Mintel’s conclusion? The recession changed consumers’ priorities and led them to focus more on home, family, friends and health. That means marketers shouldn’t expect shoppers to return to spending levels seen before the recession or flagrant use of credit cards anytime soon.
Mintel also found the following:
- Americans are most likely to think they are still scaling back spending on luxuries such as alcoholic drinks consumed outside of the home, vacations and dining out.
- Some of the increased spending is caused by price increases, especially on food, health care and technology. When survey respondents were asked why they were spending more in certain categories, price increases were often cited first.
- When it came to alcoholic drinks, vacations and leisure and entertainment, though, the reason was usually “to treat myself.” When the respondents who reported spending less were asked to explain their reasons, the most popular response was “to save money,” followed by the desire to get the best deal and a change in their circumstances.
- Mintel’s spending analysis revealed that even amid the economy’s weak recovery, consumers returned to spending the way they did pre-recession in most categories. The firm projects that future economic growth will be strongest in the home and garden, leisure and entertainment and dining out categories.
- Mintel also projects that two of the categories hardest hit by the recession – financial services and transportation – will rebound substantially, with growth of 20 percent between 2013 and 2017. (Those gains still won’t completely make up for the previous losses, however.)
- Consumers are putting “extra” money toward paying off debt, dining out and splurging on small luxuries for family members.
What do you think – are you still spending with a recessionary mindset?