Deloitte Consumer Spending Index on the Rise

The Deloitte Consumer Spending Index (Index) climbed in December.  The Index tracks consumer cash flow as an indicator of future consumer spending.

“Economic fundamentals that influence consumer spending moved in a positive direction in the latest Index,” said Daniel Bachman, Deloitte’s senior U.S. economist.  “Median home prices increased, while initial unemployment claims continued to fall.  Real wages, which have remained stubbornly flat, increased slightly as well.”

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices – increased to 4.3 this month from 3.9 last month.

“Retailers need to keep their foot on the gas in light of the positive signals that suggest improved consumer confidence and spending levels in the months ahead,” said Alison Paul, vice chairman, Deloitte LLP and Retail & Distribution sector leader.  “The holiday season underscored that consumers are not only willing to shop, but expect to do so on their time and on their terms.  Retailers can keep up the momentum by targeting consumers across different channels and geographies with more personalized, high-touch connections through mobile and online points of contact that reach a broader swath of shoppers with greater precision.”

Paul added that retailers should also consider how to reign in shoppers’ dependence on discounts, through new products, assortment and service that entice shoppers to spend at full price points, to not only drive sales but preserve margins.

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