By the time this issue hits your mailbox, it will mercifully be over. That is a reference, of course, to the deluge of election ads that have for the past several weeks (or has it been months?) been cluttering up television screens everywhere. Candidates intent on casting their opponents in the worst possible light, warned darkly of catastrophic consequences should the electorate be unwise enough to vote the wrong person into office. It’s no wonder consumer confidence is on shaky ground.
According to the October Consumer Intentions & Actions Survey from Prosper Insights & Analytics, consumer confidence in the economy dipped somewhat in October with 31.8 percent of survey respondents reporting being confident or very confident in the economy, down a bit from the 33 percent who reported so in September and 36.6 percent who did so last October.
That should not come as a surprise as consumers are very much aware of continuing price increases for just about everything. This awareness is recorded mostly with regard to meat, poultry, and fish (nearly 70 percent of survey participants) and gasoline (just short of 65 percent). What is surprising is that in most categories (utility gas and rent being two notable exceptions), consumers are slightly less aware in October of price increases than they were in the previous month. Could this mean that consumers have already become so accustomed to seeing prices increase that it hardly registered anymore?
It seems unlikely that would be the case. In October, 37.6 percent of respondents reported a decrease in their standard of living due to increased prices. This compares to 32.2 percent who reported so in September. One would hardly be unaware of the cause of such a dramatic effect. Besides, consumers have also changed their shopping behaviors, shopping for sales more often, switching to store brands, and using more coupons.
Fluctuating gas prices have also impacted consumer behavior and is of particular interest to car wash operators. In this latest survey, 35.7 percent of respondents indicated that they will be taking fewer shopping trips because of fluctuating gas prices. A year ago, that was the intent of 28.2 percent of respondents. For 33.7 percent (27 percent last October), those trips will not only be fewer but also shorter, shopping closer to home. All of which adds up to fewer miles traveled, not the preferred direction for car wash operators. Here’s an attention-grabbing change: One year ago, 47.8 percent of respondents said the ups and downs of gas prices had no major impact on their spending. For this October, that number is down to 25.1 percent.
To help assess what lies ahead for consumer spending, Prosper Insights and Analytics devised an index that goes from 0 to 100. In this latest survey, the spending score stands at 79.71, down from last month’s number of 82.62. This indicates that fewer consumers are planning on spending more over the next 90 days. The current score is the lowest since April 2020 (72.61) when the pandemic began.
To address these challenges, we can do no better than refer to Anthony Analetto’s On the Wash Front column, starting on page 8 in this issue. Anthony discusses cultivating loyalty and repeat business and urges operators to show customers they are loved. “Do it right,” he writes, “and your customers will be hopelessly devoted to your wash.”