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By Barbara Grondin-Francella
Increasingly worried about their personal finances and the economy in general, consumers have reduced spending in recent months and plan further budget cuts, including giving up indulgences and impulse items, according to a new study.
Already taking pains to better budget their income and doing more price shopping, anxious Americans are giving up things they want, according to "Dollars & Consumer Sense," a study by Yankelovich Inc., which surveyed 1,002 adults in January. Still, shoppers would rather find ways to maintain their consumption patterns in a more economical way first.
"At the first stirrings of economic anxiety, consumers try to be smarter shoppers," according to the report. "Before settling for making do with less, consumers want to look for cheaper ways of getting what they want. They will undertake major value trade-offs only if this doesn't generate sufficient economies."
The top trade-offs people are willing to make involve convenience, such as delaying purchases, indulgences and novelty. Of those surveyed, 72 percent said they were somewhat or very willing to cut out impulse purchases. Nearly one in seven said they were somewhat/very willing to purchase fewer treats for themselves or their families.
In addition, 57 percent of the consumers said they were somewhat/very willing to cut back on necessities, such as certain food items, soap and gasoline. More than half said they would be very/somewhat willing to buy the cheapest version of whatever products they purchase. Consumers are less willing, however, to accept trade-offs in quality, durability, service and basic necessities.
The higher level of anxiety, though, the more consumers are willing to endure almost any sacrifice, the study noted. People expressing the most anxiety today are renters; those financially responsible for one or more children; those who have not attended college; and those with lower incomes and without Internet access, noted John Page, research director at Yankelovich.
But low incomes don't necessarily mean the greatest changes in buying habits. "While those with lower incomes may be more likely to be anxious, we found a spectrum of anxiety in each income group, both highly anxious wealthy consumers and non-anxious low income consumers," Page told Convenience Store News.
Overall, more than 70 percent of consumers mentioned the cost of gasoline and the cost of health care as their two top concerns, though the war in Iraq and global warming also made the top six worries.
The study's results seem to be a mixed bag for c-store operators, who rely on in-store impulse buys. Retailer/jobbers who sell motor fuel and supply heating oil may also feel the affect of consumers' anxiety.
Other c-store products also are likely to feel the heat. Nearly one in six of the consumers said they were much less likely or somewhat less likely to spend money on alcohol, tobacco products and gambling this year. What these changes in consumer behavior mean for some of c-stores' biggest sellers -- gasoline, cigarettes, beer and lottery tickets -- remains to be seen.
Still,some retailers, such as those able to rollout or expand value-laden private labels or are considering green initiatives such as recycling or eliminating plastic bags, may gain the attention of anxious shoppers.
As consumers trade down in their eating-out habits, c-store operators may rediscover yesterday's fountain and hot dog promotions and have anxious shoppers eating out of their hands.