BIGinsight™ February Executive Briefing

The Monthly Consumer Survey from BIGinsight™ monitors over 8,000 consumers each month providing unique insights & identifying opportunities in a fragmented and transitory marketplace.

Talking Points:
- Consumers show a little more love for the economy in February
- Have New Year’s resolutions already been abandoned? Practicality, Focus on Needs drop
- Consumers less inclined to curtail spending, but paying down debt remains the priority
- Savers feel more confident in piggy bank balances v. Feb-11
- Kohl’s takes the helm this month in Women’s Clothing
- Consumer Migration: Electronics
- CVS bests Walgreens in Prescription Drugs
- 90 Day Outlook brightens for all categories, continues DOWN compared to pre-recession
- What’s Hot? Adele…Volkswagen…Red Carpet Fashion

Consumers are showing a little more love for the economy, as a third of consumers (33.1%) indicated they were very confident/confident in chances for a strong economy in February, rising about three points from last month (30.4%) and the highest reading we’ve seen since Jan-08 (33.5%). [Note: Apr-10 was a close call at 32.9%.] But let’s keep our head out of the clouds here…the current level of confidence is still nearly 40% below those heady pre-recession days (Feb-07 = 53.2%).

Presidential elections can inspire confidence or concern, depending on who ends up governing from the Oval Office, but it appears that the public at large is saving these emotions for the weeks leading up to November 6. This month, fewer than one in five (18.3%) report that they worry more about political and national security issues, down from 19.0% in January and the lowest reading we’ve seen for more than a year (Jan-11 = 17.7%). This data does get interesting, though, when we split it across party lines:

I worry more about political and national security issues

Have the New Year’s resolutions already been abandoned? In February, two in five (41.9%) indicate that they have become more practical with their purchasing, a six point drop from last month (47.8%) and the lowest level we’ve recorded since early ’08. Stay tuned in coming months to see if consumers continue to see a Spring in their spending, or if they are headed back into hibernation.

Similarly in style, consumers seem to have a touch of Spring fever when it comes to focusing on needs over wants…this month, nearly half (49.6%) say they zero in on just the necessities when at the store, declining about eight points from January and also echoing figures we last saw back in the first few months of 2008.

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Perhaps it’s employment that’s helping to buoy morale this month…with the official* U.S. unemployment rate recently declining for the fifth consecutive month, consumers are a little less wary about the job market compared to 30 days ago. While nearly a quarter (22.9%) still asserts there will be “more” layoffs over the next six months, this figure has declined a few points from January (27.0%). The majority of consumers (54.3%) maintain that layoff levels will remain the “same” (versus 51.0% last month), while 22.8% are optimistic for “fewer,” up a point from January (21.9%).

* Recall that the official U.S. unemployment rate does not account for discouraged workers or those underemployed.

But don’t break out the bubbly just yet…this month’s employment readings are relatively on par from a year ago, and, of course, with almost four out of five consumers expecting “more” or the “same” number of layoffs for the first few quarters of 2012, we aren’t out of the woods just yet.

Good news for retailers hoping to capitalize on Valentine’s Day shopping, after severely shoring up spending following the holiday season, consumers are less inclined to curtail expenditures in February…currently, just over a quarter (28.4%) maintain plans to decrease overall spending over the next three months, dropping seven points from January (35.5%). Consumers haven’t completely lost their financial focus…more than one in three (34.3%) plan to pay down debt, down just a point from last month (35.3%) and February’s top financial plan. About three in ten (28.2%) plan to increase their savings, while one in five (18.7%) is inclined to pay with cash more often.

In addition to employment, consumers’ more positive mood for February may have a little to do with the balance in their savings accounts…this month, nearly a third (31.1%) said they strongly agreed/agreed that they were saving enough to meet future needs, up from 27.6% a year ago. Bear in mind, though, that a greater number of consumers (38.6%) strongly disagreed/disagreed that they were putting enough away in their piggy banks; however, this figure did decline from Feb-11 (41.9%).

While gas prices continue to hover in the mid-$3/gal range, drivers are bracing for the cost of fueling up to rise, which could affect spending into March…three in five (63.3%) are expecting pump prices to increase by the end of February, while about a third (32.9%) thinks they have topped off for the time being. Both figures eclipse the scant amount (3.8%) who are hopeful that prices will head southward by February 29. Consumers are anticipating an average price of $3.69/gal at the close of the month.

With $3/gal the average tipping point, drivers already have smart spending strategies in place to cope with current pump prices…this month, two in five (39.8%) say they are simply taking fewer shopping trips, while nearly as many are shopping for sales more often (39.1%) and shopping closer to home (39.0%). Penny pinchers continue to show their love for clipping coupons (37.0%) and buying store brands/generic (32.5%) in February as well.