Ongoing Recovery

“Year over year, the changes have been slim, but when you com­pare the December 2015 survey to data compiled in December 2008, it’s evident that consumer attitudes toward spending are heading in the right direction,” says Chrissy Wissinger, director of communications at Prosper.

“Communication trumps just about everything else for today’s consumer. They don’t want to be without Internet ser­vice or their smartphone, and the idea of streaming video on demand via Netflix or Hulu has become more important every year since we began watching the category. Consumers seem more comfortable with their financial situation,” Wissinger says. “They’ve made cutbacks over time and now they’re mak­ing tradeoffs in how they spend.”

NRF Chief Economist Jack Kleinhenz said he’s seen a trend toward more dollars being spent on services versus goods—a shift supported by these data. “Consumers are spending on ser­vices such as smartphone plans and on-demand streaming, and there’s some pent-up demand for vacations and entertainment in the form of movie tickets and eating out.”

However, “2016 was not expected to be very different from 2015 in terms of economic growth,” Kleinhenz adds. “Overall consumer spending looks good, employment is solid, and there don’t appear to be any significant recession risks cropping up now. But that said, there are a number of underpinnings that need to be closely monitored. Consumer spending has varied in certain regions of the country. Changes in housing and health­care continue to bear watching, as does the aging of the Baby Boomer generation and the rise of Millennials.”

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.