According to the February Consumer Reports Index, though consumers spent more than they planned to this past holiday season, they aren’t planning to open up their wallets again anytime soon. The Past 30-Day Retail Index for February, which reflects the purchases consumers made in January, is 10.9, a decline of 23% from the previous month says the report.
The Next 30-Day Retail Index, which represents the number of electronics, appliances, and yard and garden equipment consumers said they’re planning to buy in February plummeted to 6.9 from 8.9 the prior month. That’s the lowest level it has been since August of last year.
The hesitation to spend money is not the result of personal financial hardships, however. The consumer Reports Trouble Tracker showed real improvement. It declined to 53.4 in February from 58.2 in January. The top difficulty reported in February: the inability to afford medical bills or medications (14.7 percent, up from 12.7 percent in January).
According to another Consumer Reports survey in January, nearly 70% of the survey respondents who regularly take prescription medications took steps to afford their drugs in the past year. 28% resorted (without their doctor’s or pharmacist’s knowledge) to at least one potentially dangerous measure:
* 16% failed to fill a prescription
* 16% skipped a dose
* 11% took an expired medication
* 10% cut pills in half
* 4% shared a prescription
Overall, nearly half of consumers reported reservations about generics. They said that the medications have different side effects (27 percent), aren’t as effective (22 percent), don’t meet the same federal standards (18 percent), and aren’t as safe (16 percent) as brand-name drugs. People under 65 without prescription drug coverage were especially likely to take those risky steps.
Many people also cut back on necessary purchases or resorted to dubious financial practices in order to afford their prescription drugs. For example, they:
* Spent less on clothing (30%).
* Cut back on groceries (23%).
* Relied more on credit cards (23%).
* Postponed paying other bills (15%).
The Employment Index remains unchanged, but there is a significant trend emerging, says the report. Over the past several months the proportion of Americans reporting a job loss in the past 30 days steadily declined to 5.7% in February, versus 7.8% in October. However, fewer Americans started a new job in the past 30 days (3.8% in February, from a recent high of 6.2% in September).
As a result of the overall mixed picture, the Consumer Reports Sentiment Index has remained virtually unchanged in February (43.9) from January (44.1). The Consumer Reports Stress Index is now at 59.9, on par with January (59.0), but down from December (63.0).
In an almost concurrent report, comScore reported that a strong holiday season kept online retail from finishing 2009 in negative territory, and offers hope for a better year for e-retailers in 2010. The web remains a relative bright spot for retailers, comScore says. “New buyers continue to enter the channel, and as average spending per buyer rebounds off its 2009 lows, the e-commerce channel should return to healthy growth rates.”
