A view of the industry through the
eyes of a chain buyer.
Update: How Consumers Will Spend
Their Rebate Checks
Food and gas inflation is taking
by the National Retail Federation (May 19, 2008)
Consumers still plan to spend about forty percent of their tax
rebate checks, sending $42 billion back into the economy, but what
they plan to buy has shifted slightly from February, according to
the findings of a National Retail Federation survey, conducted by
Because of the increasing prices of gas and groceries, consumers
plan to spend more of their rebate checks on necessities like gas
and food rather than on discretionary items like electronics and
apparel. Due to the rising cost of fuel, the largest leap in rebate
spending will come at the pump, as 17.2 million people plan to use
some of their tax rebate check to pay for gasoline, up from 12.1
million people who planned to do so in February. The rising cost of
everyday items like milk, bread and rice also means that more
consumers plan to spend the checks on groceries, with 21.2 million
people using a portion of the check for food, up from 20.4 million
people in February.
As a result, fewer people plan to spend rebate checks to buy
furniture (2.7 million vs. 4.0 million in February), purchase a
vehicle (2.4 million vs. 3.2 million in February), or use it for
"me" time at a salon or spa (2.9 million vs. 3.5 million
"The rising cost of groceries and gasoline means that
discretionary spending is taking a backseat to necessities,"
said NRF President and CEO Tracy Mullin. "For many consumers,
struggling with rising bills and lowering home values, economic
stimulus checks could not come at a better time."
The survey reinforced February estimates on how consumers would
spend the $105.7 billion being distributed in tax rebate checks.
According to the findings, consumers as a whole plan to spend 39.9
percent of their tax rebate checks, providing a $42.2 billion boost
to the economy. Consumers will also use the money to pay down debt
($28.1 billion), save ($20.1 billion), invest ($3.4 billion) and pay
medical bills ($4.9 billion). (Consumers said they will also use
$6.9 billion in "other" ways.)
In February, President Bush signed H.R. 5140, the Recovery
Rebates and Economic Stimulus for the American People Act of 2008.
The $152 billion measure provides tax rebate checks of up to $600
per working individual and $1,200 per married couple, plus $300 per
child for families with children and new tax incentives for
job-creating business investments.
"Many retailers have already announced creative promotions
to give consumers an extra incentive to shop with them," said
Phil Rist, Vice President of Strategy for BIGresearch. "Some
retailers are helping customers stretch the value of their rebate
check further by tacking on an additional ten percent to gift cards
purchased or holding special in-store promotions."
According to the survey, women are more likely to spend and/or
save portions of their rebate check, while men are more likely to
pay down debt. Young adults 18-24 will spend more of their checks
(43.5%) than any other age group.
The NRF 2008 Tax Rebates Consumer Intentions and Actions Survey
was designed to gauge consumer behavior and shopping trends related
to the upcoming tax rebates. The survey, which polled 8,347
consumers, was conducted for NRF by BIGresearch from April 29-May 7.
The question asked, "The sending of the economic-stimulus
rebate checks/ payments began Monday, April 28. What are you
planning on doing with the money?" The consumer poll has a
margin of error of plus or minus 1.0 percent.
BIGresearch is a consumer market intelligence firm that provides
unique consumer insights that are gathered online utilizing very
large sample sizes. BIGresearch’s syndicated Consumer Intentions
and Actions survey monitors the pulse of more than 7,000 consumers
each month to empower its clients with unique insights for
identifying opportunities in a fragmented and changing marketplace.
The National Retail Federation is the world's largest retail
trade association, with membership that comprises all retail formats
and channels of distribution including department, specialty,
discount, catalog, Internet, independent stores, chain restaurants,
drug stores and grocery stores as well as the industry's key trading
partners of retail goods and services. NRF represents an industry
with more than 1.6 million U.S. retail companies, more than 25
million employees - about one in five American workers - and 2007
sales of $4.5 trillion. As the industry umbrella group, NRF also
represents over 100 state, national and international retail
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