Foodservice Equipment Reports

Consumer Confidence Holds Up, But Analysts Worry About Brutal Winter

The January and mid-February readings on consumer confidence from Thomson Reuters/University of Michigan and The Conference Board indicated that consumers remain reasonably optimistic about the economy and their financial prospects. But many analysts, including Richard Curtin, the UM Surveys of Consumers chief economist, are worried about the negative impact on consumers’ finances of the brutal winter in much of the country. Many also are concerned about the winter’s effect on restaurant and other retail-business sales. Winters as severe as this one always push restaurant sales and traffic lower.

“The good news is that confidence proved resilient to recent government reports of weak growth in income and employment,” Curtin said as UM released mid-month figures on Feb. 14. “The not-so-good news is that the full impact on household budgets from the harsh winter has yet to be registered.” He went on to say higher-than-usual heating bills could squeeze consumer budgets further, “especially among lower-income households.”

The sharp drop in the stock market during January could also have an impact on spending by higher-income households—which account for about half of all foodservice sales—but the markets have stabilized and returned to growth so far in February.

UM’s preliminary February Index of Consumer Sentiment held steady at 81.2, the same as the final January reading; that was down only slightly from December’s 82.5 and 10% higher than January 2013. The Conference Board Consumer Confidence Index rose to 80.7 in January, up from December’s 77.5 figure.

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