Warc, 4 August 2014
CHICAGO: American consumers are "cautiously optimistic" about their finances, although they remain committed to obtaining maximum value, a new consumer sentiment index has shown.
According to the Q2 2014 MarketPulse survey from retail analysts IRI, US consumer confidence is levelling off after the significant improvement recorded in its survey covering Q1 2014.
Set against a benchmark score of 100, the latest quarterly index across all ages is still positive, at 117, but is slightly down from the 121 points registered in Q1 2014.
By generation, sentiment among millennials remains constant at 102 (versus 101 in Q1 2014) – but a significant improvement on 94 in Q2 2013 – while it dipped for Generation Xers (122 versus 127) and Baby Boomers (117 versus 120).
Tracking back to when IRI first started conducting its survey in 2011, the latest figures suggest US consumers are beginning to feel mildly more optimistic.
This quarter, 16% of consumers say they feel "a little better" about their current financial situation compared to 13% in Q2 2011, 22% indicate they feel "a little worse" (versus 25%), while those who feel the "same" is 46% (versus 43%).
This slight improvement appears to be reflected in their purchase intentions with 51% saying they are cutting back on non-essential items (versus 60% in Q2 2011) while 22% are willing to "splurge" on premium products (versus 19%).
It also seems US consumers are prepared to remain loyal to their preferred brand even if there are cheaper alternatives.
IRI found 15% only buy their preferred brand, though others are less expensive (versus 12% in Q2 2011), and the percentage giving up some of their favourite brands has fallen to 31% from 39% in Q2 2011.
However, Susan Viamari, editor of Thought Leadership at the IRI, said one-third of consumers still intend to shop at multiple stores to find the lowest prices.
"A critical takeaway from our latest MarketPulse survey is that, while optimism is emerging, consumers' continued commitment to find maximum value is as strong as ever," she said.
Data sourced from IRI; additional content by Warc