• by Jack Loechner , Staff Writer @mp_research, February 15, 2012

According to an exclusive consumer survey conducted for STORES by BIGinsight, the budget tightening that consumers have endured for four years isn’t showing signs of stopping, writes Sandy Smith. Despite positive holiday sales figures, it appears that many of the changes that consumers have made in spending habits are becoming hardened.

Phil Rist, executive vice president, BIGinsight, says “... events that have transpired over the past four years have forever changed consumers... evidenced in what they deem expendable and untouchable purchases... the retail landscape will likely never be the same... “

6,000 shoppers were asked which items are untouchable in their budgets (items they could not live without). Internet service remains the most untouchable item, a position it’s also held since 2008.

Even as consumers trimmed their spending, they’ve increased their charitable giving. Some 41% said charitable contributions were untouchable, a category that has shown continued increases since 2008, when 32% deemed giving to others untouchable.

Responding to the question about most items they could do without, luxury purses was listed as the most expendable item each year since the study began asking these questions in 2008.

Of the 36 items surveyed, 22 were ranked as expendable by at least 75% of consumers; another five items were considered expendable by more than 70%. Only four categories, Internet service, mobile phones, basic cable/satellite and discount shopping for apparel, were considered untouchable by more than half.

Eating out still remains largely expendable, though more so for women than men. Fine dining was considered an unnecessary expense by 89%, closely followed by fast-casual (restaurants like Panera Bread) at 76%, casual sit-down dining (69%) and fast food (65%).

As consumers focus more on eating at home, the quality of the food has become more important. Organic foods have consistently become more untouchable, rising from 15% in 2008 to 19% in 2011. Of those who have cut back on spending, 37% say they’ve done so in organic food purchases, placing this category mid-pack among those earmarked for budgetary trims

With economic growth lagging, even though the recession was declared officially over more than two years ago, not all purchases can be put off forever; clothing doesn’t fit any more, shoes wear out and “mom jeans” draw derision. As the economic conditions have continued, consumers have become much more likely to make discount and department store shopping for apparel untouchable. Specialty shopping, 9% in 2008, 10% in 2011, has remained fairly steady.

A new pair of jeans and new shoes have become even more expendable over the past four years. In both cases, women find these items to be more expendable than men. 25% of men say a new pair of jeans is untouchable, compared with 19% of women. For new shoes, it’s 31% of men who find the purchase untouchable, compared with 26% of women. Both categories become more expendable as age increases; 26% of those 18 to 34 say a new pair of jeans is untouchable, compared with 16% of those over 55.

The recession has forced many consumers to stop living the high life. Country club memberships, designer purses, high-end cosmetics, high-end jewelry, maid service and facials top the list of most expendable items, and are only slightly more expendable for those making less than $50,000 than for those who make more.

One broad area where consumers are not changing their viewpoints is in leisure activities. Extra-curricular sporting leagues, movie theater tickets and fitness/gym memberships have increasingly become untouchable. Fitness and gym memberships have continued to gain each year since 2008, when only 14% viewed them as untouchable, to 18% in 2011.

Of those who have cut back or plan to, movie tickets were the second-highest area of cuts, with 58% saying they no longer spend what they once did on catching the latest Hollywood offering. That’s an attitude that’s felt at the ticket window: Box-office tracker Hollywood.com announced that ticket sales hit a 16-year low in 2011.

70% viewed vacations as expendable in 2008, compared with 71% in 2011. Like movies, those who have cut back have taken a knife to their annual getaways, with 57% saying they have or plan to cut back here. The woes of the magazine world are reflected in the survey as well. Magazine subscriptions have become more expendable (87%) in 2011, up from 85% the year before.

Technology has solidified its place in the consumer’s budget, with Internet service seen as expendable by only 18%. That figure has remained at or below 21% for each of the four years of the survey. And it doesn’t appear likely to change: Only 11% of those who have or plan to cut back say they’ll do so in the area of Internet service.

Mobile phones also have become viewed as a necessity, with only 33% labeling them as expendable. This figure remains virtually steady among all age groups. But younger consumers tend to see more expanded mobile phone capabilities, like web access and texting, as being untouchable. Only 15% say they have or will cut back on basic mobile phones (16%), about half the number who say they have or plan to cut back on enhanced phone services like texting (31%) or mobile devices like iPads (34%).

For more information, please visit BIGinsight here, or STORES here.