Convenience store retailers are no strangers to dealing with adversity. Whether it’s Wal-Mart, finding talented labor or dealing with high gas prices, the industry has persevered by choosing good locations and providing outstanding service to loyal customers. But a downturn in the economy poses a new threat many may not be ready for: loyal customers with empty pockets.
The majority of U.S. consumers (86%) believe the country is currently in a recession and more than half (54%) believe it will last longer than 12 months, according to a new survey by The Nielsen Co.
Nielsen’s survey shows that when it came to predicting the end of the recession, most consumers are pessimistic. Only 18% said they believe the recession will be over within a year. The least amount of confidence was expressed by 25- to 29-year-olds, with just 6% saying the recession would be over within 12 months. Fifty-two percent of consumers in this age range say they do not believe the recession’s end will come that soon. Similarly, only 7% of consumers age 65 and older believe the recession will be over within the year, and 63% of consumers in this age range also say they don’t believe the recession will be over within 12 months.
"Younger consumers grew up in an era of prosperity and have never really known economic challenges to this extent," said James Russo, vice president of marketing for Nielsen. "To them perhaps, the current economic downturn is uncharted territory. There is a pervasive feeling of uncertainty and concern, which is clearly affecting spending levels. Older consumers are understandably concerned because of the potential impact on their near-term financial needs."
In what could be considered a favorable sign for convenience stores, men were markedly more optimistic than women about the recession’s end, with 27% of males responding affirmatively, compared to only 11% of females. When asked about the state of their own personal finances over the next 12 months, 39% of females responded "not so good" compared to 28% of males. Only 16% of women surveyed think their job prospects over the next 12 months will be good, compared to 26% of men.
Not surprisingly, Nielsen’s research found that 38% of U.S. consumers consider the economy their biggest concern over the next six months. The finding was fairly consistent across different age groups, with Americans over 50 even more worried. Among all U.S. consumers, increasing fuel prices comes in a distant second place at 10%, followed by debt (9%), increasing utility bills (7%), increasing food prices (5%) and job security (5%).
One potentially troubling detail the survey showed was that consumers are employing a number of belt-tightening strategies to help them cope with economic woes. Trying to save on gas and electricity was cited by more than two-thirds (67%) of U.S. consumers, while more than half of consumers (54%) said they are using their cars less often.
Should they find themselves with extra money in their pockets, the majority of U.S. consumers are hesitant to spend it. Once they have covered essential living expenses, 38% of consumers put any spare cash into savings, while 36% use it to pay off debts, credit cards or loans. Nearly a quarter of consumers (24%) report having no spare cash.
"As far as consumers are concerned, it doesn’t particularly matter that a growing number of economic indicators are pointing in that direction," Russo said. "They were feeling pain in their wallets and bank accounts long before October’s tumultuous stock market activity."