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CHICAGO — This presidential election is giving American consumers much more to think about than politics. According to the latest IRI Consumer Connect survey, two-thirds of consumers said their financial health is poised to deteriorate in 2017 regardless of who wins the presidential election this year.
This is a stark contrast compared to consumers who have been a bit more optimistic about their personal finances and putting the Great Recession behind them over the last few years, the data firm said.
Overall, 64 percent of consumers believe their households’ financial health will decline if Donald Trump is elected, vs. 60 percent who said the same if Hillary Clinton is elected. On the flip side, 36 percent said they believe their households’ financial health will improve if Trump is elected, vs. 40 percent who said the same of Clinton.
“While Americans’ attitudes toward personal finances have improved in recent years, this election process appears to signal a shift in consumer sentiment,” said Susan Viamari, vice president of thought leadership for IRI. “However, the changing of the guard at the White House always represents uncertainty, but this year close to 60 percent of consumers feel that their financial health will deteriorate no matter who is elected president. This will absolutely impact retailers and consumer product goods (CPG) manufacturers, as they brace for a tightening of the purse strings.”
The presidential election will also sway consumers on how they shop. According to IRI, consumers partake in shopping behaviors like making lists and shopping at multiple retailers when they feel their budgets are being squeezed.
The latest Consumer Connect survey found that:
- 62 percent of consumers who think their finances will decline said they will make shopping lists, vs. 59 percent who think their finances will improve;
- 75 percent of consumers who think their finances will decline said they will buy needed items when they are on sale to save money, vs. 54 percent who think their finances will improve;
- 62 percent of consumers who think their finances will decline said they will purchase private-label products to save money, vs. 41 percent who think their finances will improve;
- 48 percent of consumers who think their finances will decline said they will try new, lower-priced brands to save money, vs. 36 percent who think their finances will improve; and
- 38 percent of consumers who think their finances will decline will visit multiple retailers to keep the grocery bills down, vs. 35 percent who think their finances will improve.
Although consumers may partake in shopping behaviors that will save them money, they still want to treat themselves and will continue to splurge on indulgences. Consumers who are optimistic about their finances in 2017 said they will splurge on: gourmet food and beverages (56 percent); local/artisan food and beverages (55 percent); prepared/easy-prep meal solutions (51 percent); fancy, natural/organic food and beverages (51 percent); technology that would make shopping the store more exciting (48 percent); and the ability to purchase online and pickup in store (39 percent).
During the Great Recession, younger consumers had the most pessimistic outlook. However, the tide is turning. According to the survey, younger consumers are now more optimistic than older consumers about their personal finances in the next six months prior to the inauguration of a new president. Consumers aged 18-34 said they believe their financial health will improve in the next six months (78 percent), compared to 69 percent of consumers aged 35-54 and 60 percent of those aged 55 and up.
Younger consumers are also willing to make tradeoffs to save money:
- 53 percent of consumers aged 18-34 and 51 percent of those aged 35-54 buy beauty products that are not their regular brands because they’re on sale, vs. 40 percent of those aged 55 and up;
- 59 percent of consumers aged 18-34 and 48 percent of consumers aged 35-54 buy food and beverage brands that are not their preferred brands because they have a coupon, vs. 41 percent of those aged 55 and up; and
- 54 percent of consumers aged 18-34 and 46 percent of those aged 35-54 buy over-the-counter (OTC) medications that are not their preferred brands because they have a coupon, vs. 36 percent of those aged 55 and up.
However, these consumers said they will continue to splurge, too. Those aged 18-34 said they are willing to pay more for food and beverages that are natural and organic (38 percent), as did 31 percent of those aged 35-54, vs. 21 percent of those aged 55 and up. Additionally, 58 percent of consumers aged 18-34 and 52 percent of those aged 35-54 are willing to pay more for OTC medications that treat multiple symptoms, vs. 43 percent of those aged 55 and up.
”When it comes to decoding the consumer mindset, there is perhaps nothing more complicated than predicting how a significant transition, such as electing a new president, will impact the way consumers feel and behave,” Viamari concluded. “CPG manufacturers and retailers must be more vigilant than ever as the torch is passed, and ready to respond in real time to shifting attitudes that ripple through the marketplace.”