Recession Concerns Cause 64% of US Adults to Cut Back Household Shopping

Nearly two-thirds of Americans surveyed in April 2008 say their households have cut back on spending in the last 12 months, according to the MarketTools May/June 2008 Insight Report on American Spending, MarketingCharts reports.

The nationwide survey of 1,000 U.S. adults also reveals that cutbacks are not limited to those with lower incomes. Among affluent consumers with household incomes of $75,000 or more, 54 percent indicate they too have cut back spending - see chart.

Among categories of spending, dining out and entertainment have suffered the most cutbacks and are often the first to go when overall household spending is reduced. (View chart of cutbacks.)

Other findings:

• 66 percent of all respondents say they have cut back on dining out in the past 12 months. Among affluent respondents with incomes of more than $75,000, 57 percent say they have reduced expenditures on dining out.
• 61 percent have cut back on entertainment.
• 57 percent have cut back on clothing and accessories.
• 54 percent have cut spending on travel and vacations.
• 48 percent have reduced spending on gifts.
• 41 percent have reduced spending on technology products.

Despite economic pressures, consumers have actually increased their spending in certain categories in the past year: 24 percent of respondents indicate that they have increased spending on groceries and 16 percent have increased spending on prescription medications. However, research suggests these increases are the result of increases in national food and drug prices rather than increased consumption.

Americans have also changed their grocery shopping behavior in the last year, the research found (view chart). Top changes include a greater reliance on “store brands” instead of “name brands” (51 percent) and use of coupons more often than in the past (46 percent).

Additional behavioral changes in grocery shopping:

• 44 percent of all respondents say they are shopping less frequently or stocking up.
• 42 percent have switched to less expensive brands.
• 39 percent are shopping closer to home to save on gasoline.
• 35 percent are cooking more from scratch.
• 33 percent are buying more at discount outlets.
• 32 percent are buying more food to be used as leftovers.
• Just 15 percent say they are shopping more at club stores, but 30 percent of more affluent consumers say they have been shopping more at club stores in the past year.

About the research: MarketTools Insight Reports regularly report findings on topical, national issues. May/June report data is based on an April 2008 survey of 1,000 online respondents drawn from ZoomPanel. Insight Report respondents are a nationally representative sampling of the US adult population, age 18+.