Though the economy is finally showing signs of being on the upswing, American consumers aren’t buying into the idea of a full-blown recovery just yet.
According to a recent study by market research firm Mintel, more than 9 out of 10 (91 percent) of consumers in the U.S. are sticking to the very tight budgets they created to help them weather stormy economic times.
We’re all budgeters now
Diana Smith, an analyst at Mintel, said, “Americans are holding onto their budgeting mentality post-recession, with many sharing a penchant for ‘beating the system’ – stretching their dollars in a way they deem valuable.”
The Mintel study found that:
- 40% of Americans can be called “heavy-budget shoppers”
- 46% are budgeting at the same level as two years ago
- 45% are budgeting at a higher level
- 57% of millennials are sticking to tighter budgets
The study pointed to a number of reasons for this continued household belt-tightening. Some consumers, it says, are responding to higher prices for household staples such as food, electricity, and energy. Others are trying to pay down debt. And others are making do with reduced incomes because of unemployment or a drop in work hours.
How consumers are “beating the system”
Smith said consumers have been willing to sacrifice convenience for savings when it comes to shopping. She noted a few of the strategies budget-conscious consumers are using to stay within their means:
- Shopping more often at major retailers
- Comparing prices between stores
- Buying more generics and store brands
- Sharing discount discoveries with friends and family
In one surprising result, the study found that affluent consumers (those with incomes over $150,000), were more likely to choose store brands than their less wealthy counterparts.
Consumer buying habits often lag behind changes in the economy. And the budgeting behavior of the people in the Mintel report is clearly not an exception to the rule. The question going forward is whether tight budgets will loosen up as the economy grows stronger – or will they become a permanent part of consumers’ financial outlook?