ChangeWave’s February consumer spending survey presents a mixed picture of the U.S. consumer. Overall consumer spending is unchanged from our January survey results, but consumer sentiment and expectations have turned decidedly negative.
Add in severe snowstorms that have paralyzed some sections of the country for days at a time, and the overall February outlook actually appears dimmer. Moreover, there are few signs of momentum within individual spending categories — with the exception of an uptick in Travel/Vacation spending — as consumers continue to try to pay off debt and rebuild their tattered personal finances.
Three-in-ten U.S. consumers (30%) now say they’ll spend more over the next 90 days than they did a year ago — up 1-pt since our previous consumer spending survey in January. But another 32% say they’ll spend less — which is 1-pt worse than previously.
As the following chart shows, there has been no net change since last month. Nonetheless, the year-to-year comparison does represent a huge 47-pt net upturn over 12 months ago.
There is one bit of good spending news. For the first time in eight months we’re seeing a significant improvement in Travel/Vacation spending. Nearly one-in-four respondents (24%) say they’ll spend more on Travel/Vacation over the next 90 days, and 27% less — a 4-pt improvement since January.
Consumer Electronics spending, however, has registered another post-holiday decline. Just 18% say they’ll spend more on consumer electronics going forward compared to 32% who say less — 6-pts worse than previously, but still a net 17-pt improvement over a year ago.
Downturn in Consumer Sentiment and Expectations
We also asked consumers about their current impressions of the economy, and in contrast to the big improvements seen in January, consumer sentiment and expectations have turned decidedly more negative in the current survey.
Better than a third of respondents (35%) now think the overall direction of the U.S. economy is going to worsen over the next 90 days — a 12-pt slide since January. Only 25% believe it will improve, which is 11-pts worse than previously.
In a further disquieting finding, fully half (50%) say they’re Less Confident in the U.S. stock market than they were 90 days ago while just 13% are More Confident — a net 27-pt decline since December and the worst reading we’ve picked up in nearly a year.
Retail Store Trends
While the February 1-9 survey of 2,774 U.S. consumers shows few signs of momentum, there are three retailers that are clearly outperforming.
Both Costco (COST) and Target (TGT) are experiencing upticks in overall spending — even as the spending picture among most of the other major retailers remains flat. It’s worth noting that Costco is also showing renewed momentum in the home entertainment market.
On the downside, for the second survey in a row Wal-Mart (WMT; -2) is registering a slowdown in terms of spending growth going forward. This is the first time in the past two years that we’ve seen Wal-Mart decline over two consecutive surveys.
Home Entertainment Retailers
It’s on the home entertainment front where we’re seeing the most momentum of all, and it’s in the form of Apple (AAPL; 15%; up 3-pts).
Our February survey was conducted in the aftermath of Apple’s iPad announcement, and our findings show it has helped generate a major increase in projected spending going forward for the Cupertino, California manufacturer.
A total of 15% of respondents now say they’ll shop at Apple stores for home entertainment and computer networking products over the next 90 days — a 3-pt jump since January and the highest level ever recorded for Apple in a ChangeWave survey.
Paul Carton co-wrote this article.
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