IRI: Gov't Shutdown to Have Significant Impact on Spending
CHICAGO -- Things are looking up in Washington, D.C., but a new survey indicates that the weeks-long government shutdown and debt ceiling crisis is weighing on consumers' minds.
According to Information Resources Inc.'s (IRI) Q3 2013 MarketPulse survey results, 85 percent of American consumers were aware of the looming debt ceiling crisis and of the government shutdown, which is clearly impacting their views on personal finances, including their approach to grocery shopping.
The survey was fielded to consumers between Sept. 27 and Oct. 3, and covers the days leading up to the government shutdown and after the shutdown began.
The impact on finances and day-to-day living are expected to be significant, with some consumer segments bracing for particularly challenging conditions. The lowest-earning households (those earning less than $35,000 annually) will be hit the hardest, with families and Millennials faring only slightly better, according to the Chicago-based research firm.
Consumers called out the following specific concerns about how they expect the fiscal crisis to impact their personal finances and shopping behaviors:
- Forty-six percent of all consumers anticipate increased financial strain vs. 63 percent of lowest-earning households, 56 percent of households with kids and 54 percent of Millennials.
- Forty-five percent of all consumers plan to increase their focus on grocery prices vs. 62 percent of lowest-earning households, 54 percent of households with kids and 48 percent of Millennials.
- Thirty-five percent of all consumers expect to have less money vs. 55 percent of lowest-earning households, 44 percent of households with kids and 42 percent of Millennials.
- Thirty-three percent of all consumers expect increased difficulty in meeting monthly expenses vs. 55 percent of lowest-earning households, 45 percent of households with kids and 41 percent of Millennials.
- Thirty-one percent of all consumers will eliminate/reduce trips to some favorite stores vs. 45 percent of lowest-earning households, 39 percent of households with kids and 35 percent of Millennials.
"Consumers have been locked in a prolonged game of economic dodgeball, with one challenge after another coming right at them," said Susan Viamari, editor of IRI Times & Trends. "The government shutdown and debt ceiling crisis are just more hurdles, and the growing uncertainty really has consumers worried and hunkering down."
According to IRI data, consumers across the board have not notched up their already-conservative behaviors in the third quarter, but this could quickly change if the fiscal crisis continues to drag on.
In the meantime, the following range of shopping behaviors remains pervasive among households with kids in particular. Since this is one of the largest consumer product goods purchasing segments, marketers need to keep a watchful eye on this group’s attitudes and behaviors:
- Sixty-four percent are cutting back spending on non-essential items.
- Fifty-four percent are trying new brands priced below regular brands.
- Fifty-two percent are looking for products that treat multiple symptoms when buying over-the-counter medications to eliminate the need to purchase multiple medications.
- Forty-five percent are shopping multiple stores to find the lowest prices.
- Forty percent are using online resources to find coupons.