Are we at the bottom yet?
It’s surely a sign of something when editors break out the “consumers are cutting back” articles. The New York Times featured a big one today with lots of interesting statistics and observations. As you would expect, there are lots of signs of cutting back, passing on little indulgences, switching to off brands, shopping the low price stores. All perfectly rational decisions given the general mood. Here’s a bit that I did find surprising . . .
By no means has the economic downturn been bad for all product categories. For instance, sales of big-ticket electronics, like $1,000 flat-panel televisions and $300 video game systems, are on the rise, according to retailers and research firms.
Falling prices for such devices and a looming government deadline to convert to digital television have helped. So has the view, sensible or not, that the technology is a good investment. At a Best Buy in Southfield, Mich., James Szekely, 28, a mechanical engineer, was shopping for a big high-definition TV that he expected would cost at least $2,000, an expense he rationalized because “at least we can watch movies at home.”
(In a survey conducted this month by the NPD Group, a research firm, consumers suggested that they would sooner cut spending on clothing, furniture and eating out than on video games.)
And this . . .
. . . chains that emphasize low prices, like TJ Maxx and Wal-Mart, are thriving. And cut-rate supermarkets, like Save-A-Lot, are swamped.
“People are not not spending, but they are changing how they spend,” said Marshal Cohen, chief analyst at the NPD Group.
What does it all mean? Usually by the time this sort of thing gets written, the turn is here or about to get here. At least that’s how it works on the upswing.
Tags: Recession, Cutting Back, Savings, Decision Making
