CHICAGO — Shoppers are already looking past the holiday season and not liking what they see, according to a special survey conducted between Oct. 31 and Nov. 5 by IRI that was released Tuesday. While consumers are hoping for the best, they're bracing for the worst when it comes to the possibility of another government shutdown and debt ceiling crisis in early 2014.
“The impending debt ceiling crisis and government shutdown is yet one more straw on the camel’s back, and consumers are ready to react by locking down their wallets,” Susan Viamari, editor of Times & Trends, IRI said. “CPG marketers must continue to monitor the situation carefully and be poised to rapidly deploy programs that will support consumers through the next financial obstacle, but it is critical that these programs are carefully designed to support—not erode—brand equity and justify the expenditure with a solid value proposition.”
Overall, 53% of consumers are not confident that an agreement will be met to avert another government shutdown and debt ceiling crisis, while 32% are unsure and 15% are confident. This skepticism is chipping away at consumer confidence, so many are already putting some safety nets in place to weather the storm and holiday spending is right in the cross hairs.
In fact, 43% of all consumers are budgeting less money for the upcoming holiday season out of concern that the country will hit the new debt ceiling, and the government will shut down once again. In addition, 52% of Hispanics, 47% of households with kids and 53% of lower-earning households will be pulling back on holiday spending.
If the country hits the new debt ceiling and the government shuts down in early 2014:
- 57% of all consumers expect their financial strain to increase versus 46%, who anticipated increased strain before the October 2013 shutdown;
- 45% of all consumers say they will have less money to spend on groceries versus 35% before the October 2013 shutdown; and
- 44% of all consumers say they will have to reduce/eliminate trips to some of their favorite stores versus 31% before the October 2013 shutdown.