Consumers Cut Spending amid Inflation, Go to Web for Deals

Everyday consumer spending is taking a beating, with some 56% of 3,359 online shoppers surveyed April 29 to May 23 indicating that they are cutting back because of the weak economy and growing inflation, according to PriceGrabber.com’s Consumer Behavior Report, writes MarketingCharts.

(View chart of the categories in which consumers are trying to save money.)

According to the report:

• 42% of respondents indicated retail shopping as the primary category in which they are reducing spend.
• More than one-third of respondents indicated that their top money-saving trick for retail shopping is the use of comparison-shopping websites.
• Other ways consumers are reducing their retail spending is through discount and bargain shopping and using low-interest credit cards or cash.

Tax refunds to pay off debt

Some 65% of 1,328 online shoppers surveyed March 25 to April 19 said they plan to spend their tax refund.

Of that group, 45% plan to use that money on an existing loan. Of the respondents applying their refund to a loan, 68% indicated a credit card as that loan (see chart).

Even with concern about an unstable economy, 22% of tax refund spenders indicated using the refund for home improvement and 11% for a vacation.

Economic stimulus checks

Despite government efforts to increase consumer spending through the economic stimulus program, a June survey of 2,483 online shoppers found that 89% of respondents are still cutting back.

Similar to the results of the tax-refund survey, more than one-third of consumers who indicated that they spent their economic stimulus checks used them to pay off debt.

31% of online consumers spent their checks on retail shopping. Of those who spent their stimulus checks, 27% bought one large item and 25% spent the money immediately on multiple items.