Lessons Learned - The New Thrift

The recession has led consumers to address new behaviors many of which will be with us well into the recovery.

Spending has fallen into ill repute. When asked what they would splurge on when the recession was over 17% would opt for a vacation but, surprisingly, 15% would not splurge on anything. Other splurges included – remodeling home (13%) or a new car (10%).

Some of the most common behaviors adopted by consumers to cope over the past year included:

• Purchased only what you absolutely needed (71%)
• Gone out to dinner less often (61%)
• Spent less on vacations (58%)
• Put less on credit cards (53%)
• Invested more conservatively (51%) 

Some of these will be with us well into the recovery. Consumers with these new behaviors will represent a substantial proportion of the consuming public. The behaviors that will have the greatest impact on the market after the recovery are:

• Reluctance to spend – buying only what is absolutely needed (44% of adults)
• Put less on credit cards (42% of adults)
• Invest more conservatively (38% of adults)
• Put more into savings (35% of adults)  

Consumers have become very cautious in today’s economy . If given a windfall of $10,000 nearly half (48%) would choose to use it to pay off debts (28%) or put it in savings (20%). Another 9% would invest it or save it for college expenses (9%). In total, two-thirds (66%) of consumers would use the $10,000 to address debt or savings/investment.

Method:
The Consumer Reports National Research Center conducted a telephone survey of a nationally representative probability sample of telephone households. 1,009 interviews were completed among adults aged 18+. Interviewing took place over July 30 – August 2, 2009.

The margin of error is +/- 3.2% points at a 95% confidence level