Study: Improving economy helps some retail verticals

Consumers are being choosy about where they are spending extra money that is becoming available with the end of the recession.



According to a new study from Mintel, more than two in five (44%) Americans describe their financial situations as "healthy" in 2016, compared to 37% in 2015 and 33% in 2013, indicating that improvements in the economy are being felt at a household level. However, different retail categories are receiving the benefit more than others.



For example, the household care products market has experienced only minimal growth in recent years, rising just 3% during 2010-15 to an estimated $47 billion. Household care consumers balance their continued focus on economizing with strong interest in products that offer greater convenience, cleaning performance, and safety, as 47% of household care consumers say easy to dispense is a top purchase driver, along with safe (43%) and easy (31%) to use.



In contrast, the home and garden market experienced steady growth, increasing 20% between 2010 and 2015 to reach an estimated $451.1 billion. Study results show the bathroom linens segment saw the strongest 2015 gains. With half (49%) of consumers reporting a willingness to splurge, bathroom linens is a key area for increased spending as consumer confidence grows.



In addition, Mintel predicts that increases in “experiential” spending (such as vacations and leisure/entertainment) could have a negative impact on growth in the clothing, footwear and accessories market. This category has seen decelerating growth since 2011 reaching $431.9 billion in 2015.



One exception may be the accessories subset of this category. Accessories saw a particularly good year in 2015. Three in five (60%) consumers purchased jewelry or watches 2014-2015, and smartwatches in particular are poised to bolster the entire category. While only 6% of adults bought a smartwatch in the year ending June 2015, 21% are highly interested in them, with early adopters and younger men pinpointed as key targets. Almost four in 10 (37%) of men 18-34 express interest in smartwatches. Nearly one third of the same group wears watches to make a fashion statement.



"A relatively strong jobs market, low gas prices and an overall strengthening economy have made many Americans feel more confident in their financial situation,” said Dana Macke, senior lifestyles and leisure analyst at Mintel. “However, it appears that some may be waiting for the other shoe to drop, demonstrated by cautious spending and steady rates of saving. In 2016, deal-seeking behaviors prevail, and brands must continue to provide the utmost value to their consumers. In an environment where consumers have a little more discretionary income on their hands, we find that value isn't measured by the price per pound but by the strength of the brand name and the quality of the product.”