Tapped Out Consumers May Take the Cheer Out of 4Q Sales

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Tapped Out Consumers May Take the Cheer Out of 4Q Sales

08/25/2006
NEW YORK -- Despite the amazing resiliency of the American consumer since the recession of 2001, there is a growing concern among economists that the factors that propped up consumer spending through this turbulent period may be fading. The result could be a restrained holiday selling season, according to a new report released yesterday by Executive Perspective, a new VNU information service targeted for senior executives who shape their company’s strategies in the consumer packaged goods (CPG) and retail industry.

Citing numerous economic drivers (slowing job creation, declining business spending, a stalled housing market, etc.), the report warns of a broad-based slowdown in consumer spending on the horizon. However, it also points out that although discretionary spending is likely to dwindle, consumers will likely continue to pay for smaller, affordable luxury items, such as that $5 cup of Starbucks coffee. In addition, wealthy consumers -- less affected by rising fuel costs -- can still be counted on to purchase high-end goods like plasma TVs. The report also points to the VNU Retailer Sentiment Index, a monthly survey of up to 500 retailers, which shows the retailers are becoming less optimistic about future business conditions, especially so since January of this year.

Executive Perspective makes use of the combined data and market knowledge of ACNielsen, the Retail Group of VNU Business Media, as well as government data sources. For subscription information, contact James Russo at 646-654-7964, or email: [email protected]