A new ChangeWave survey of 2,719 U.S. consumers shows spending is continuing to improve going forward, led by upticks in consumer electronics, durable goods for the home, restaurant spending and household repairs/improvements.
Tempering these findings, the September survey shows large numbers of consumers are still hunkered down attempting to repair their finances. Nonetheless, things are looking significantly more positive for consumers as we head towards the crucial holiday spending season.
Improved Consumer Spending for September
Better than one-in-four U.S. consumers (26%) now say they’ll spend more over the next 90 days than they did a year ago — up 2-pts since the previous survey in August. While 41% still say they’ll spend less, that’s 3-pts improved from previously.
The improvement in consumer spending is occurring across several key categories — with consumer electronics, restaurants spending, durable goods for the home, and household repairs/improvements the biggest beneficiaries.
- Consumer Electronics spending has risen a net 3-pts since August — with 17% saying they’ll spend more on electronics going forward compared to 34% less.
- For the first time since June we’re also seeing an improvement in Restaurant spending — up a net 2-pts since the previous survey.
- Spending on consumer Durable Goods for the Home has continued to improve for the second consecutive survey — and is up a net 2-pts for the month.
- For the first time since May spending on Household Repairs/ Improvements is improving (up 2-pts) — 34% say they’ll spend more compared to 16% less.
Other categories, however, show weakness — particularly automobiles.
After having experienced an uptick in the previous survey, Automobile spending is down 2-pts in the current survey — most likely due to the ending of the hugely popular “Cash for Clunkers” program.
Retail Store Trends
Along with Sam’s Club ( +2), which is currently showing momentum, the only other major U.S. retailers in our survey to register slight increases were Nordstrom (JWN) and Sears (SHLD) — each up 1-pt in overall spending going forward.
Note this is the first time since before the recession began that we’ve picked up slight indications of momentum for Nordstrom.
Somewhat surprisingly, the large discount retailers have registered a slight downtick since the August survey, with Costco (COST) declining 2-pts and Wal-Mart (WMT) down 1-pt. Target (TGT) — which has shown momentum in recent surveys — is also down 2-pts.
We note that Amazon (AMZN) finds itself down slightly from its record high of three months ago, although it’s still up 8-pts compared to one year ago.
But the bottom line is that spending is continuing to improve going forward, led by upticks in consumer electronics, durable goods for the home, restaurant spending, and household repairs/improvements.
However, the September survey shows large numbers of consumers are still hunkered down attempting to repair their finances. Moreover, there are few signs the September spending increase will result in any big improvements for the major retailers.
Nonetheless, things are looking significantly more positive for consumers as we head towards the crucial holiday spending season.
Jean Crumrine co-wrote this article.