Why Consumers Aren't Opening Up Their Wallets This Summer
For all the talk of the economy bouncing back, consumers seem less convinced. A recent Gallup survey of 1,029 Americans aged 18 and over found slightly less than half (45 percent) are spending more than they did a year ago, while 18 percent are spending less. But it's not on the things you'd expect.
The majority of their money is going toward household essentials, things such as groceries, utilities, gasoline, and healthcare. As for discretionary purchases, those just aren't a big priority. Nearly a third of the surveyed adults said they're spending less on travel (38 percent), dining out (38 percent), consumer electronics (31 percent), and new clothes (30 percent). However, they are spending about the same on their rent or mortgage and household goods as they were a year ago.
This is the first time Gallup has measured household spending in this way, so it's hard to say whether the patterns are typical. Still, it's clear rising costs--especially on food--and creeping inflation have put a damper on budgets, so much that Americans are thinking twice before they go out. As a result, small businesses will need to work harder to get their attention.
One bright spot in the study is that the majority of Americans (69 percent) are taking a summer vacation. Though most will go on a road trip (81 percent) and opt to stay closer to home, it presents an opportunity for local businesses to craft clever promotions.
JILL KRASNY | Staff Writer
Jill Krasny is a staff writer for Inc. magazine, where she covers the intersection of entertainment and startups. Prior to Inc., she was a writer for MTV and Esquire and an editor at TheStreet. She is a graduate of the University of Southern California with a degree in communication. She lives in New York City.