That headline from Chain Store Age* brings smiles to retailers.
Consumer confidence is a key indicator of retail sales, and this increasing confidence as we head into the holiday season is very welcome indeed.
- “Concerns about inflation dissipated further in September—prompted largely by declining prices at the gas pump—and are now at their lowest level since the start of the year,” according to Lynn Franco, senior director of economic indicators at The Conference Board.
- "Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022," added Franco.
- "According to PwC’s Global Consumer Insights survey, overall consumers are still spending, but what they’re spending on has changed — less discretionary spending and more spending on necessities such as food and fuel." **
- As consumers realize “preparing a holiday meal for friends and family is going to be more expensive this year so they know they’re going to have to spend on that and they’re going to cut back on maybe gifts and some travel," observes Kelly Pedersen, partner and U.S. retail leader for PwC.
Good reminders for all retailers as you consider your promotional messages and in-store displays. How best to showcase the yes-this-is-a-gift qualities of your merchandise?
WHO Will Be Spending? It's a Generational Thing
But what really caught our attention in the PwC survey was this insight regarding WHO is most likely to be spending. “There was a big difference between generational spending levels,” Pedersen says.
- “Overall holiday spending for millennials was predicted to be up 11%. It’s a very significant increase. Baby Boomers? Down 11%. Gen Xers are about flat to previous years."
Yes, that's quite a swing!
- Millennial spending UP 11%
- Baby Boomer spending DOWN 11%
- “Millennials have been the highest beneficiaries of changing jobs, getting significantly higher pay at new companies — which seems to have translated into higher spending.”
- "Meanwhile, Baby Boomers are scaling back and spending more on health care and saving for retirement," he added.
By all means, be encouraged by the rising consumer confidence numbers. But be very savvy about your own holiday sales projections. Be sure they reflect the demographics of your customer base.
What a good reminder for all retailers!
Even more revealing than what is selling is knowing WHO is buying!
* "Consumer confidence rises to five month high," Marianne Wilson, Editor-in-Chief, CSA, Chain Store Age, September 30, 2022
** "Examining the state of retail heading into the holiday season," Retail Gets Real podcast episode 285, September 28, 2022.