Consumer Spending – The Winners and Losers!

What will consumers be cutting you ask? Non-essential items are the 1st to go.

When the money is tight budgets have to be cut and with 42% of the population making less than $25,000 a year these are the items to observe.

Landline Phones – Consumers with landline phones and cellular phones will cut the landline account and keep the cell. 

VOIP– Consumers with cell phones will drop those $25 a month fees for bundled cable VOIP or Vonage in favor of cell phone only or the $20 a year MagicJack VOIP or Skype.

Cell Phone PlansSprint’s SERO $30 a month plan including data and voice will look much better to those paying $60 – $100 a month

Cable TV – Consumers will move to internet video on the TV in a big way … dropping their $55 a month cable TV bill in favor of no bill. Media from the PC and the internet are going directly to the TV these days with the Popcorn Hour, Xbox, Netgear’s eva8000 Digital Entertainer, Sling and many others streaming Hulu and Netflix etc. … the internet is now a giant set of rabbit ears for your free TV.

Cable Internet – wait … before you say “HUH … nobody will be giving up broadband, but they will be giving up the $50 a month cable broadband bill with bandwidth cap in favor a $25 a month DSL bill with no cap (if they can get DSL their area). In fact more people will signup for DSL internet access just for the TV and shopping savings.

8 Cylinder Cars and Trucks – You can’t even give them away and 6 cylinders vehicles won’t fare much better. Carpooling and public transit have already seen a huge jump.  Gas mileage is now a factor in considering jobs.

Brick and mortar stores – The big box stores will do okay … online shopping will experience a massive boost because of the potential savings on tax, gas and price.  Amazon Prime membership will increase making it like a giant Costco with the convenience of home delivery at a cheaper price.  UPS and FedEx will be benefit.

Name Brand Food – Food is one of those items people can’t do without but they can change their buying habits. Many consumers won’t buy a name brand item now unless it is on sale at a price comparable to similar non brand name items. Store brands sales will increase. Luxury food items will gather dust on the shelves. Inexpensive items such as rice and pasta will fare well.

Meat – Chicken – Pork – Bacon – Ham occasionally are affordable … Beef is way too expensive – Seafood is excessively expensive.

Vegetables – Canned vegetables ok … and frozen vegetables if they are on sale – fresh vegetables are way too costly.

Grocery Items –$3.99 a gallon generic laundry detergent YES … Tide’s $15.99 a gallon laundry detergent HECK NO. In with generic toilet paper … out with Charmin (sorry Mr. Whipple).  Many products normally purchased as non food items at the grocery store will be bought at the local Dollar Tree store. (Shampoo, soap, toothpaste, baggies, aspirin, vitamins, cleaning liquids etc)

Clothing – Hello Goodwill – goodbye Macy’s.

Dining – Expect an exodus from dining out … especially for menu items over $10. McDonald’s dollar menu will thrive.

Big Stoves – No sale … existing stoves will sit unused. Energy prices will push consumers to more use of microwaves and toaster ovens.

Hot Water Heaters – A move to instant on hot water systems will bring a large energy saving. Those that do not upgrade to instant on will at least lower the thermostat to the minimum.

Window air ConditionersEnergy efficient windows units allow you to cool just the room you’re using instead of cooling the whole house with the central air. Anticipate a jump in programmable thermostats and zone systems for central units.

Tech Gadgets – The industry will thrive as consumers spend to save with technology advancements that reduce monthly bills (like cable TV and phone). Spending more time at home means more entertainment needs … benefiting PC sales, gaming, books, and software …




One response to “Consumer Spending – The Winners and Losers!

  1. thepennypincher

    Good observations.

    As for dropping the landline and keeping only cell, we can’t do that here in Canada because of lack of competition. Our cell phone companies gouge us. My cheapest option: buying the cheapest cellphone and having a pay as I go plan. The phone cost me less than $50, and I spend maybe $20 every three months on my cell.

    For long distance, I use a I can call anywhere in the world for pennies a minute. A great deal and the sound is great. Unlike Skype where the quality is not always great and you need headphones and a microphone, Jajah connect one phone (at home, work or cell) to the number you are trying to call. Quality comparable to calling over a regular landline.

    As for dining, I agree with you there. I see people going to expensive restaurants only as a rare treat (i.e. once a month or a few times at most). Instead of stoves, slow cookers will become increasingly popular as they require little heat and little preparation time. You can prepare a meal in a few minutes before going to work, and have it ready when you come back home.

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