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Do you know what a consumer is?

The morning business section of my newspaper has a top headline speaking about how awful sales have been and will be in the retail world.  Funny, to me this isn’t news, it’s just reality.  News ought to be something we didn’t already know…hence making it new. But I digress.

Associated Press writer Christopher S. Rugaber makes the case that “…consumers may have too many worries….” Some of the issues facing consumers that Rugaber notes are:

  • “…unemployment
  • flat wages
  • tighter credit
  • fear of layoffs
  • the urge to save
  • shrinking home equity
  • stock portfolios….” [causing disappointment – my addition]

I totally agree with his assessment.  I’m both a business person and a consumer and feel the crunch in both areas.

  • unemployment – this is a fear that affects many of my neighbors…the fear of suddenly having no income influences whether someone spends the money they currently have.  Someone I’ve spoken with recently said she frequently shops at Ross-Dress for Less, a discount chain of clothing stores [and household items].  Her comment was that people she knows are leery of spending money anywhere else because they are afraid they might not have a job and the holidays are just around the corner…and yet, the new school year has begun.  Unemployment is a huge fear factor in consumer spending choices.  I can agree with that.
  • flat wages – this one hits close to home.  I have family members who received zero raises this year.  Consumer prices have risen, but income has not.  It is beginning to cost the most of a $5 bill to purchase one loaf of bread – at full price.  [in the 1950’s it was less than 50 cents.]   As a consumer, I find myself choosing the sale price on brands I’d rather not buy because the brand I’d rather have is just too expensive.  When people’s income is flat and prices rise the phrase “too expensive” creeps into even grocery shopping…not just luxury items.
  • tighter credit – this is one area to which I won’t spend much time…we use credit sparingly…credit is, after all, simply spending money you don’t yet have…it has to be paid back – with interest.  My humble prediction is that the 2009 holiday retail shopping experience is going to reflect consumers desire to use credit less than before.
  • fear of layoffs…this one is huge.  I know of a young couple who are right now having to consider the wisdom of the husband’s changing jobs...his current employer recently offered a slew of early retirement packages as a way of reducing their workforce [and payroll] and there is the ever-present specter of layoffs.  Also, the new position being looked at is no sure thing…if he did get a position there, would that job be assured?  There is no sure thing.  Another young couple I know did have layoff shadow their lives this year.  Last year all was good…the husband even got a raise and a pat-on-the-back for work well done…and this year he got a pink slip.  Fear of layoff is very real…it definitely keeps money in the pocket.
  • the urge to save – as a consumer I am finding myself desiring to have money left in my pocket at the end of the month.  The shaky economy has me worried enough that I’m going to have to save money in order to (1) be able to purchase those items I truly do want and (2) have a hedge against the financial unknown.
  • shrinking home equity and stock portfolios I’ll admit I’m not qualified to give opinions on.  We do own our home; we bought 7 years ago and have seen the value of the homes in our neighborhood rise to almost ridiculous heights and then plummet.  As for stocks…I’m just not willing to take the risk at this time…I’m not willing to divide my pool of available money and risk any portion of it.

So.  A consumer is all of us. We all buy.  We buy to have food, shelter, transportation and health care.  We buy  clothing.  We have to use our money to make repairs on cars, appliances and other items around our homes.  We have to make hard choices when our economic future is questionable.

Right now a consumer is:

  • a person not sure if his or her paycheck is secure
  • someone unsure if his or her savings will cover a sudden job loss or wage reduction
  • men and women facing hard choices in how to spend precious money reserves…or whether to spend them at all
  • people who are being careful

In my own business, my home-based direct selling business, I appreciate that my customers [consumers] are being careful in how they spend their money.  I appreciate that my products are a good value for the price.  I greatly appreciate that one of the “products” of my business is the income opportunity of having a home-based business…and that right now it doesn’t cost anything for signup.  As a business person I appreciate what the economic climate is from a consumer’s point-of-view.

What is your definition of a consumer and do you see the remaining quarter of 2009 as challenging for consumers?

***that was pretty heavy, wasn’t it?  Here’s something more refreshing, so-to-speak:

Tune in next Wednesday, August 19th, at 9pm ET, CNBC and Fortune Magazine will present the “Fastest Growing Companies of 2009” – profiling the hot profit engines that could make you rich. Among the companies profiled during the hour are: BlackRock, Chipotle, Arena Resources, Deckers Outdoor Corporation – and more. The companies are ranked on revenue, earnings growth, and their stock returns over the past three years.
See which sectors of the economy are still booming and go inside the hot companies that are taking full advantage of their position by posting sizzling growth in a slow-growth world.

CNBC Managing Editor, Tyler Mathisen and Fortune Magazine Managing Editor, Andy Serwer will co-host the primetime special, which premieres Aug 19 at 9P ET.


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