Consumer spending higher than anticipated in April
Market researchers and analysts have recently expressed concern that gradual and sustained consumer pullback would lead to a stifling of the retail economy as spenders become more and more conservative with their income throughout the year. This led to predictions of slower sales throughout the coming months. However, recent data shows that sales actually advanced in the month of April. There was reportedly a 0.1 percent growth after a 0.5 percent decline in the month of March. Bloomberg reports:
“Lower fuel costs combined with rising stock and home values are boosting buying power, which will help underpin purchases as the labor market improves. Resilient sales indicate the effects on spending from a higher payroll tax will prove temporary, corroborating forecasts of a pickup in the economy after a second-quarter soft spot.”
So what happened in April, and is it an anomaly? The point of fuel costs is a salient one that may have more effect on people’s buying decisions than we anticipate. When it’s so difficult to predict the rise and fall of fuel on any reasonable timeframe, it can be hard to incorporate into predictions, and thus it can be hard to develop the right strategies for making sales. Also worth considering is whether people receiving their tax returns had any effect on their willingness to spend some cash.
Still, retailers shouldn’t get too invested in market analytics unless there’s something serious going on. Your strategies for success should be relatively the same whether or not buying is at a high or a low. If you really notice a dip in customers and sales, you can try new things out, but be careful – you don’t want to set your prices too low or do anything too rash to affect long-term success.