Deloitte Consumer Spending Index continues growth
Deloitte's Consumer Spending Index, which evaluates tax burden, initial unemployment claims, real wages and real home prices, was up 1.8 points in March, marking only the third time the index has risen in the past 12 months – a good sign for retailers banking on better sales this year. Consumers aren't quite back to their pre-recession spending habits though, and Deloitte was quick to note that several factors may be impeding further spending growth.
Most notably, real incomes fell 0.1 percent in February even though consumer spending grew and is up 0.3 percent this year. Additionally, the savings rate has declined from 4.7 percent to 3.7, which accounts to approximately $110 billion in consumer spending. Without that drop-off, consumer spending may have fallen. Real consumer spending is up 1.8 percent.
Additionally, commodity prices are also rising, which impacts how much disposable income consumers have to spend on retail. Gasoline prices, for example, rose 4 cents last week and are up 68 cents as a whole since mid-December. Food prices are also climbing, and the more consumers spend on these two staples, the less they will have to spend at retail locations.
"The warmer weather is helping consumers shake off the winter doldrums, but they remain vigilant about their pocketbooks, particularly in the face of rising gas prices this spring," said Alison Paul, vice chairman of Deloitte LLP and retail and distribution sector leader. "In our third annual spring survey of U.S. households, consumers told us they are feeling slightly better about the economy and their finances, compared to a year ago."
Deloitte also noted that mobile devices and the internet are becoming more important to the retail sector. Consumers are using these two communication channels to research products and services before they buy. However, not all retailers are leveraging these mediums, and merchants may be able to get a leg up on the competition by integrating the web and mobile into promotional strategies.
As recent data from comScore has found, more than 104 million Americans now own smartphones. To put that into perspective, that is approximately half of the country's mobile subscriber base.
