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Survey shows consumers plan on buying necessities with rebate checks
According to a recent survey by the National Retail Foundation, more consumers plan on spending 40% their rebate checks, but the items they plan on buying have shifted since a February poll was taken.
May survey highlights changes in consumer sentiment since February
The most recent survey undertaken by the National Retail Foundation is a follow-up to a survey taken in February. Even though consumers plan on using much of the stimulus check to pay down debt or put it into savings, they still plan on spending 40% of their rebate checks.
Much of the shift since February in the allocation of their spending can be attributed to the rise in both gasoline and food prices. Back in February, 5.3% of respondents planned on using their check to purchase gasoline, while 9% planned on buying necessities, such as food. In May, those figures rose to 7.6% and 9.3%, respectively.
How the auto industry fared
Back in February, 1.4% planned on using their check to purchase a car, while that figure dropped to 1.1% in May. While this isn’t particularly good news, those of us at Auto Credit Express prefer to look at it as a “glass half full” kind of news. After all, 1.1% is better than none, and even with the drop, that still means that 2,437,686 people are planning on buying a car (an estimate, extrapolated from the sample size).
“The rising cost of groceries and gasoline means that discretionary spending is taking a backseat to necessities,” said NRF President and CEO Tracy Mullin. “For many consumers, struggling with rising bills and lowering home values, economic stimulus checks could not come at a better time.”
Another interesting result of the survey shows that women are more like to spend and save, while men are more likely to pay down debt (come on guys, get it together!). As for age groups, those consumers between the ages of 18 and 24, the youngest group polled, are more likely to spend their checks than any other group.
More survey facts
According to the press release, “The NRF 2008 Tax Rebates Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the upcoming tax rebates. The survey, which polled 8,347 consumers, was conducted for NRF by BIGresearch from April 29-May 7. The question asked, “The sending of the economic-stimulus rebate checks/ payments began Monday, April 28th. What are you planning on doing with the money?” The consumer poll has a margin of error of plus or minus 1.0 percent.
The Bottom Line
While consumer attitudes have definitely changed since the first of the year, there is still a tremendous opportunity for car dealers to take advantage of the extra money in consumer’s pockets. While the number of people who plan on using it to buy a car has dropped by 32%, that drop isn’t nearly as bad as the furniture market (-45.5%) or the housing market (-73.7%). So look on the bright side and make this a better spring selling season!