Survey Uncovers Impact of Government Shutdown and Debt Ceiling Crisis on Consumers

English: Barack Obama delivers a speech at the...

English: Barack Obama delivers a speech at the University of Southern California (Video of the speech) (Photo credit: Wikipedia)

According to a survey, 85 percent of American consumers are aware of the looming debt ceiling crisis and of the government shutdown, which is clearly impacting their views of their personal finances, including their approach to grocery shopping. The survey was fielded to consumers between Sept. 27-Oct. 3 and covers the days leading up to the government shutdown and after the shutdown began.

“Economists are definitely trying to figure out if the current anxiety will turn into a big economic downturn or if these fears will be just a blip in consumer sentiment that will go away when the government reopens.”

The impact on finances and day-to-day living are expected to be significant, with some consumer segments bracing for particularly challenging conditions. Lowest-earning households (those earning less than $35,000 annually) will be hit the hardest, with families and millennials faring only slightly better. Consumers called out the following specific concerns about how they expect the fiscal crisis to impact their personal finances and shopping behaviors:

  • 46 percent of all consumers anticipate increased financial strain, versus 63 percent of lowest-earning households, 56 percent of households with kids, and 54 percent of millennials
  • 45 percent of all consumers plan to increase focus on grocery prices, versus 62 percent of lowest-earning households, 54 percent of households with kids, and 48 percent of millennials
  • 35 percent of all consumers expect to have less money, versus 55 percent of lowest-earning households, 44 percent of households with kids, and 42 percent of millennials
  • 33 percent of all consumers expect increased difficulty in meeting monthly expenses, versus 55 percent of lowest-earning households, 45 percent of households with kids, and 41 percent of millennials
  • 31 percent of all consumers will eliminate/reduce trips to some favorite stores, versus 45 percent of lowest-earning households, 39 percent of households with kids, and 35 percent of millennials

Consumers across the board have not notched up their already conservative behaviors in Q3 2013, but this could quickly change if the fiscal crisis continues to drag on. In the meantime, the following range of shopping behaviors remains pervasive among households with kids in particular. Since this is one of the largest CPG purchasing segments, marketers need to keep a watchful eye on this group’s attitudes and behaviors.

  • 64 percent are cutting back spending on non-essential items
  • 54 percent are trying new brands priced below regular brands
  • 52 percent are looking for products that treat multiple symptoms when buying over-the-counter medications to eliminate need to purchase multiple medications
  • 45 percent are shopping multiple stores to find the lowest prices
  • 40 percent are using online resources to find coupons

From: IRI

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