It may be sunny outside, but consumers are still feeling gloomy. Although there are indications that the worst of the recession may have passed, consumers feel worse about their own economic conditions than they did a year ago, according to a poll released July 19 by Alix Partners, a management consulting firm.
Consumers seem reluctant to spend on dinners at the Olive Garden, owned by
Consumers were more optimistic a few months ago than they are now, says David Bassuk, managing director of retail at Alix Partners, which also polled consumers in February and November 2009. "The hangover is here," he says.
Topping consumers' concerns: Personal debt levels and job security. Eighty-three percent of those polled said they planned to spend the same or less on non-essential purchases. When it comes to clothes, many plan to recycle what they're wearing rather than purchasing new basics. Instead, many are looking to accessorize themselves more extravagantly with jewelry and shoes. That's one reason footwear is selling this year, Bassuk says.
Retailers offering the highest and lowest end goods are in better shape than those in the middle, the survey concluded. Bassuk expects "a big separation between winners and losers in retail."
Are happy days just around the corner? Not likely. Consumers said they expect to resume their pre-recession spending in 2013. Improved economic conditions could, of course, speed up a recovery in consumer spending. But given how shell shocked shoppers have become--and how dependent on easy credit--the risk of further disappointment remains real as well.
