MTSU Office of Consumer Research
Posted: Thursday, December 3, 2009 2:16 pm

Middle Tennessee Consumer Confidence by Quarter   Nov. '07 Feb. '08 Apr. '08 May '08 Oct. '08 Dec. '08 Feb. '09 Apr. '09 May '09 Sept. '09 Dec. '09 Overall Cons. Conf. Index 225 158 44 30 1 4 -66 105 113 142 83 Current Situation Index 88 49 -15 -19 -57 -109 -160 -121 -118 -107 -101 Future Expectations Index 75 53 24 11 59 56  21 109 110 143  94 Purchasing Situation Index 62 56 35 38 -1 57  73 117 121 106  90 Consumers have lost some of their confidence in the economy as we head into the very important Christmas and Holiday shopping season. Confidence among Middle Tennessee consumers has declined rather dramatically from its September level.  This drop ends a rebound in consumer confidence that began earlier this year.  The overall confidence index fell to 83 from 142 in September. Consumers continue to recognize that the current U.S. economy is in bad shape.  Consumers have also become less optimistic about the local Middle Tennessee economy.  The percent who said that business conditions in Middle Tennessee are “good” dipped to 16 from 18, with the percent saying that local business conditions are “bad” increasing to 22 from 17. Fears about further losses in the job market are having an excessive drag upon consumers’ feelings regarding the future of the economy.  Most local consumers still have concerns about the job market, and many are fearful about future contractions in the job market. So, what does this mean for retailers?  Will this drop in confidence among local consumers have a negative effect on consumer spending heading into the very important Christmas and Holiday shopping season?   Unfortunately, negative views of the current economy, fears about the current job market and future contractions in the job market, and concerns about personal finances suggest that many local consumers are still keeping a tight grip on their wallets. A recent survey conducted by the National Retail Federation found that while there were more shoppers out on this Black Friday compared to last year, they spent less than they did last year.  Due to the poor economy, many consumers braved the crowds in search of deals and significant discounts. In sum, here is what we can expect from consumers with respect to their Christmas and Holiday shopping: - Consumers will be frugal - even more so than last year. - Consumers will be very cautious about purchasing big ticket items. - Consumers will focus on bargains and items that are budget friendly. - Items on many shoppers' lists include books, apparel, toys, games, and movies / DVD's. - Consumers will expect significant markdowns, discounts, and special offers from retailers - Online shoppers will hold out for incentives and deals, such as free shipping