As the economy continues to tighten, so too are consumers' wallets and purses. According to a recent report from Empathica, a number of shoppers are spending less money on specialty retail categories – such as apparel – in order to buckle down on key commodities, like food and gasoline.

As many as 58 percent of surveyed respondents said they are cutting spending on clothing and apparel, while 65 percent plan to devote less of their budget to electronics. Of the top 10 retail segments that American consumers plan to spend less money in, four were specialty retail categories. Conversely, nine out of 10 customers send they are spending the same or more on gas, while only 20 percent intend to reduce grocery expenditures.

"The economy as a whole is still on the mend, and although we are starting to see an uptick in the job market, it doesn’t necessarily mean consumers are eager to spend," Gary Edwards, chief customer officer at Empathica, explained. "Uncertainty still remains among consumers with continued caution around spending on nonessentials."

With consumers spending less money, it's crucial that retailers trim the fat on their offerings. Merchants should consider integrating Retail Pro's inventory management solutions as a way to identify which products are still making money for businesses.

This entry was posted by Retail Pro on Wednesday, July 4th, 2012 at 9:13 am .