Alvarez & Marsal’s Consumer and Retail Group (CRG) recently released its Spring 2024 Consumer Sentiment Report, which sheds light on the impact of ongoing economic concerns on consumer spending patterns and priorities.
The report, based on a survey of over 1,800 consumers, reveals a growing consumer pessimism heading into the spring season. Specifically, consumers with higher household incomes are intending to reduce spending on essentials, experiences, gifts, and indulgences this spring. The report also shows a notable trend towards prioritizing saving over spending in higher income brackets, with a surge in the percentage of respondents prioritizing saving compared to previous cycles.
Chad Lusk, Managing Director at Alvarez & Marsal’s Consumer and Retail Group, emphasized the importance of retailers utilizing the data and insights from the report to develop financial plans, manage inventory, and enhance marketing campaigns. The report provides valuable information for retailers to align with consumer spending plans and adjust strategic priorities accordingly.
The study found that consumer outlook for spring is weaker, with consumers anticipating spending less and having less money compared to previous cycles. Despite financial uncertainty, consumers are still eager to take vacations this year, showing resilience in their desire for leisure compared to the previous spring. However, the report also highlights the increasing trend of cost-conscious consumers engaging in sales and second-hand shopping as a way to reduce spending.
One of the key insights from the report is the increased use of second-hand shopping by higher income households to save money. The report indicates a significant increase in the number of respondents earning $100K+ who shop second-hand to save costs this spring. Considering this trend, Lusk advised retailers, particularly those servicing higher income consumers, to anticipate providing discounts and promotions across different categories as the season progresses.
Overall, the Spring 2024 Consumer Sentiment Report provides valuable insights into shifting consumer behaviors, concerns about increasing prices, and factors shaping purchase decisions for the upcoming spring season. Retailers can leverage this information to minimize overall liabilities, develop pricing strategies, and anticipate consumer priorities across various spending categories.
For additional information and to access the full report, visit the Alvarez & Marsal Consumer and Retail Group website.
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