These aren't exactly earth-shaking numbers, but they do point to discernible changes in consumer spending patterns after the payroll tax increase.
"To date, shifts in shopper behavior are subtle, but patterns are emerging that deserve close and ongoing scrutiny," Davey says.
Dollar sales growth for all channels was steadfast at 2.1% in January and the previous month, while "dollar sales growth at mass merchandisers decreased to 3.3% from 5.3% in this timeframe. It appears that dollar stores have picked up some business from mass merchandisers," the firm reports. "Club store dollar sales growth also registered a similar decline."
Symphony reports that middle-class shoppers are spending less so far in 2013, although high-income earners (not surprisingly) are spending at their usual rate. The firm says that lower-income earners are actually shopping more, but it's because they're buying groceries to eat at home to avoid going to restaurants."We expect payroll tax increases will impact non-consumer packaged goods spending (such as gas, clothes, entertainment) potentially more than consumer packaged goods spending," Davey says. This "shrinking wallets" syndrome, as Symphony calls it, could start hurting the economy. Davey expects U.S. economic activity to be "stagnant" because of the tax increases and sustained high unemployment. "Moreover, the recent significant spike in gas prices is going to further squeeze the consumer's wallet. Some stores, convenience stores in particular, are very sensitive to gas price increases," he adds. The impact of the payroll tax hike is worth keeping eye on, he says. So far this is only a one-month snapshot, but Americans already seem to be hurting with less cash in their pocket, and that is not good news for the U.S. economy.
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